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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Amy J who wrote (102768)	4/21/2000 7:49:00 AM
From: GVTucker	Respond to of 186894

RE: Book value vs Market Cap For a business like Intel's, it is true that book value really isn't relevant to our discussion. But Intel Capital is a portfolio of securities. Book value is relevant here, just as it is relevant for a mutual fund or a company like Berkshire Hathaway. Most of the valuation there is in public marketable securities, which would unquestionably would be valued at 1x book value. For the private market securities, certainly 1x book wouldn't be applicable, but some multiple of book would certainly apply, and this number would be based upon Intel's past success. Comparing Intel Capital to CMGI is comparing Intel Capital to a very successful enterprise, so I don't think that I was giving Intel Capital any less credit than it deserves. Note that things like intellectual property is not part of Intel's market cap. Given that Intel Capital is actually investing in other firms, intellectual property would indeed be reflected in Intel Capital's book value. Because the cost basis for a private company might not accurately reflect the actual value of that company, you would need to adjust that book value accordingly to a multiple greater than 1, as I did.