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Technology Stocks : 3DFX
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To: Patrick Grinsell who wrote (12121)4/29/1999 12:31:00 AM
From: Michael G. Potter  Read Replies (2) of 16960
 
Pat,

A certain amount of merger expenses are considered to be part of the deal and are treated as part of the purchase price. I'll be back in Kansas tomorrow and I have all the accounting pronouncements in a database on my home computer so I'll look uo the rules and post here.

I'm expecting 3dfx do do a certain amount of "In Process R&D" expensing as a result of the merger. That results in a big one time hit that the street normally ignores and which improves earnings downstream because there is less goodwill on the books. The SEC is cracking down on this, however, so there is less room to do this.

I think that 3dfx will report as a combined entity for Q1 once the merger goes through. I've seen a few posts speculating that they'll release earnings on the same day. That would be fastest close in history, especially for a newly merged company. That won't happen. I bet that they have a target date set, but will hedge their bets and allow it to slide if their Controller needs more time.

Michael
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