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Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: sea_biscuit who wrote (21389)	8/27/2001 2:50:26 PM
From: RetiredNow	Read Replies (1) \| Respond to of 24042

Well, I did a quick check of their AR and noted that it has risen pro-rata as revenues have. That tells me that they aren't involved in heavy financing of their revenues, which also jives with who their customers are (Nortel, Lucent, Cisco). As far as writing off revenues, they haven't written off any. I think what you probably mean what does their writeoff of goodwill mean to their business fundamentals. I've already documented in a previous post why I believe their writeoff of ~$40 B in goodwill was a non-event. It was an accounting distraction. The over-inflated prices for the acquisitions JDSU made were paid for with over-inflated currency. It was a wash that looked ugly on paper, but didn't mean squat to their ability to generate cash, which is what the smart folks care about. Here's a thought experiment for you. If I offered to sell you a business for $10 that would generate positive net cash flows for you of $10 every year for the foreseeable future, would you buy the company from me? I bet you would. What if I told you that in addition, the income statement will continue to show a net loss for the foreseeable future due to a large goodwill # from lots of acquisitions? Would you still buy it? If you didn't, you'd be giving up a really good deal. Who cares what the income statement show as long as my bank account is growing every year at a good clip. That's the whole point. All JDSU did was to take the entire loss this year, instead of doing the slow-drip water torture of reporting losses over the next few years. Either way, they are still generating good positive cash flow, so that's what we need to focus on for a clue as to whether we should buy, hold or sell.