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Technology Stocks : Gemstar Intl (GMST) -- Ignore unavailable to you. Want to Upgrade?

To: Uncle Frank who wrote (3673)	8/17/2000 11:13:53 AM
From: 100cfm	Respond to of 6516

Frank Usually when you use EBITDA to view a company's performance it's because they have good gross margins but the net margins are negatively impacted by short term expenses such as mergers and aquisitions. A fast growing company maybe making lots of money but will show little or no earnings or maybe a loss when they report earnings according to GAAP. Thus they emphasize their EBITDA. That's OK as long as it's short term, the problem is if they make having to view earnings via EBITDA a permenant habit, meaning they never show real profits. I don't think that will be the case here. But what I don't understand is why they just don't take the hit all in one QTR and get it over with ala NTAP. This way investors will have better earnings visibility going forward. We all know how the street hates earnings ambiguity. 100

To: Uncle Frank who wrote (3673)	8/17/2000 11:30:46 AM
From: jwadsworth	Read Replies (1) \| Respond to of 6516

When you ramp up new businesses, you incur equipment costs (eg servers to transmit guide data), resulting in D&A, which is a non-cash, earnings reducing expense. In a sense, D&A actually helps a co. because it reduces taxes and enables a buildup of cash. I personally own over 17000 shs of GMST and am more convinced than ever after yesterday's meeting. I do have a bias, however, I insist on investments that are good for at least a year & a day; I cannot abide sharing 39.6% of my profits with Sam , so I don't trade. Remember,the ramp-up of ad revs. is in an embryonic stage, and the EPG obsoletes some of the current rev. stream from TVG (as we move print to electronics). I have a TWX guide in a digital SFA box in NY, and a TVG guide in FL. The latter is better, and the former is under patent litigation. Add that to E-books, in which I have gone from skeptic to enthusiast especially after previewing the new Thompson offering yesterday, and you may see why I am this long.