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

To: kjhwang who wrote (104717)	6/22/2000 8:19:00 AM
From: GVTucker	Read Replies (1) \| Respond to of 186894

thecoolinvestor, RE: Hence, if a business cannot generate a ROI greater than an appropriate discount rate, then the business should be valued at 1xbook value (aside from various accounting tricks to reduce book value for tax purposes). Otherwise, a multiple is appropriate to factor in economic goodwill. I guess that this depends on your definition of goodwill. If you're talking about economic goodwill in the general sense, then I would agree with you. Reasons why I would pay greater than book for Intel Capital: --Most of the private companies in the portfolio are most probably undervalued. --The management at Intel Capital has access to deals that most investors could not access. --The management at Intel Capital have a skill set that can add value in selecting deals and growing its businesses. I'm sure there are other reasons, but this is what I think of off the top of my head. In my mind the latter two reasons would be thought of as economic goodwill (but certainly not accounting goodwill). Advantages that could accrue to Intel's core business in various ways certainly have some intangible value, but these intangibles will contribute to the growth rates of the core business' earnings and revenues, and thus can be accounted for within the core business.