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Technology Stocks : Rockwell-Spins off Conexant (CNXT) -- Ignore unavailable to you. Want to Upgrade?

To: David W. Taylor who wrote (1055)	5/10/2000 9:00:00 PM
From: gpowell	Read Replies (1) \| Respond to of 2013

These charges can also be a result of the accounting procedures used to account for mergers. For instance, the purchase accounting method will result in the majority of the purchase price of assets being assigned to goodwill. The goodwill is then depreciated over the life of the asset and the depreciation will be charged against earnings. If stock was used as the currency to purchase the asset then the depreciation charge against earnings can be thought of as the "Physical" manifestation of the stock dilution. In this case, the charge to earnings should be discounted entirely - since the effects of the merger are up front, i.e. stock dilution. In an ideal situation, the purchased asset would complement the existing business to an extent that any loss in "earnings" is more than made up. This isn't always the case though. However, even in these cases the earnings charges are just related back to the stock dilution. These are good things to keep track of because they are a measure of management effectiveness. If the management of the company is continuing to piss away the value of their company through poor strategic decisions, you'll want to know it. That is one purpose of separating the effects of one-time charges and the metrics associated with the core business.

To: David W. Taylor who wrote (1055)	5/11/2000 9:04:00 AM
From: MeDroogies	Read Replies (1) \| Respond to of 2013

I don't remember a time, in the last 20 years (my investment period), that one time charges that were negative were viewed poorly. The AOL instance, you might say, is an example...but it doesn't hold water, because the stock was already under attack, and while it hit a low shortly afterward, it bounced back quickly to reach the highs it now hovers around. You have to remember that if you're going to view one time charges as a negative (again, something most people don't do), you would have to view one time gains as a positive (something people don't do). Think about it. How does a one time gain improve business prospects? It generally doesn't. Similarly, one time charges don't injure business prospects. The fact that different sites post different numbers proves nothing. All sites post the same information, you just have to know how to perform DD, and look for the whole story. You seem like a guy who, upon hearing fire engine sirens, believes a house is burning down, without realizing that the false alarm rate is something like 50%. My dad once taught me the value of information like that. Lawyers are fond of quoting that 80% of all malpractice suits are found for the plaintiff. Pretty good numbers, huh? Except that less than 25% of all cases go to court, and the remainder are either thrown out or settled by insurance companies. People will point out that settling is as good as winning in court. In fact, it isn't. There is no burden of guilt proven, and payouts are considerably smaller....usually because the case is specious to begin with. Right now, there are a few people running around saying the sky is falling. Every time the market falls, they do it. They aren't looking at the bigger picture. In Oct 98, the Economist ran an article about the market called "Just Fall, Dammit!". The market promptly fell, then rebounded (no, the Economist didn't make it happen). It ran a similar article in Feb (of course, it runs similar articles once a month). People make a big deal of this stuff....until the worm turns.