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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: nommedeguerre who wrote (36362)	1/12/2000 7:47:00 PM
From: greg nus	Read Replies (2) \| Respond to of 74651

Norm, here another little tidbit for you about Aol. Due to the twx merger aol will be writing off about $165 billion in good will for the twx merger. It's a present from Case that keeps on giving and will be around longer than reruns of Gone with the Wind. For the next 20 years aol will amortize the good will at the rate of $7 billion a year. In other words the first $7 billion a year of earnings will go to pay for the merger not to retained earnings. can you say $7 billion? twenty times real fast. Not to mention any aol earnings will have to be spread over the new aol/twx shareholders. It's called dilution. So to recap today we discussed goodwill, amortization and dilution. Tommorrow we will discuss acretive and non-acretive as they relate to mergers.