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Technology Stocks : AUTOHOME, Inc -- Ignore unavailable to you. Want to Upgrade?

To: DOUG H who wrote (10899)	6/9/1999 6:17:00 PM
From: E. Davies	Read Replies (1) \| Respond to of 29970

And in addition it would decrease the present value of any cash/ST securities Decrease the present value of cash? eh? Bottom line is that the present value cash does not change with interest rates at all. Thats why its called "present" value! The whole idea that a company with more cash should be worth more as rates go up seems utterly absurd to me. Am I missing something? One could argue that maybe such a company should not go down as much however. You might also be able to justify higher value because as a borrower who is essentially short bonds (they sell them to the public) the present value of the bonds decrease with a rise in rates. I suspect this is what the Fool really meant. I suspect that the value would only go up if the projected earnings-interest payments are negative. AMZN might be a good example. Long term rates have rising from 5% to 6% since January. Can anyone calculate what impact that has in the discounted future earnings model for ATHM or a stock like it? Eric