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Technology Stocks : LSI Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Robert Salasidis who wrote (18904)	6/15/1999 7:25:00 PM
From: shane forbes	Respond to of 25814

Robert: This cost basis calculation is not for taxation purposes but for return purposes. See the first post to Dipy about this a few back. I think in effect what he is doing is calculating an average break-even point for his entire position in the stock starting from inception. This in effect serves as a proxy for the average return on the holding since inception (take the appreciation [current share price - breakeven price] and divide by the break-even price & multiply by the remaining shares to yield the dollar return). But to make sure I have to see how he calculates the example I gave him. -- ending song: Repeat 19-- 'The base revenues for LSI were $1.85 billion in 1998. Except for a IPR&D accounting writeoff (bogus), the Symbios assets that LSI bought were not subsequently written off. What did take place was a $5.4 million Symbios Integration Accrual. Per the 10-K, page 42, this accrual comprised '$4 million related to involuntary separation and relocation benefits for approximately 300 Symbios positions and $1.4 million in other exit costs primarily relating to the closing of Symbios sales offices and the termination of certain contractual relationships.' Therefore it appears that the $75 mil restructuring charge taken later was for the 'old LSI' and has very little negative bearing on Symbios continuing operations. LSI valued Symbios at a fair value of $804 million - $324 million for tangible assets, $214 million for current technology, $37 million for assembled workforce and trademarks, $83 million for goodwill, and $146 million for IPR&D (this part was written off). In this context, $5.4 million is puny and irrelevant. Symbios' assets (read: ability to generate revenue) only strengthened after integration with LSI. They did not weaken. Further, LSI has not indicated that they discontinued anything significant in the Symbios product line. Because they used purchase accounting (versus pooling) LSI can't use pro-forma Q1, Q2, Q3 or full-year 1998 numbers going forward. It is NOT because, as Jock mumbles grandiosely: "It would be a terrible disservice to the company, shareholders, and the public in general.". Give me a freakin' break.' ---