Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (45890)	1/7/2002 7:48:46 PM
From: Murrey Walker	Read Replies (2) \| Respond to of 65232

nobody gave a shit I care, Jimmy!(G)

To: Jim Willie CB who wrote (45890)	1/7/2002 9:31:48 PM
From: stockman_scott	Respond to of 65232

AOL Monster Charge Reflects Internet Era Excesses Monday January 7 8:14 PM ET By Deepa Babington NEW YORK (Reuters) - Welcome to the reality club. After the heady days of the Internet bubble when companies fueled by sky-high stock prices went on acquisition binges, media giant AOL Time Warner Inc. (NYSE:AOL - news) on Monday became the latest to post a massive charge to reflect the drop in share prices that came as the dot-com boom bit the dust. The company on Monday said it would take a $40 billion to $60 billion one-time charge in the first quarter to write down the goodwill on its books, citing market declines since its acquisition of Time Warner Inc. two years ago. By doing so, the No. 1 Internet firm is effectively admitting that its shares and those of Time Warner, which it bought in January 2000, were grossly overvalued, said Jim Harrington, who leads the accounting and SEC technical services group at accounting firm PricewaterhouseCoopers. ``I just think its an indication of how everything was overvalued,'' said Harrington. One thing that isn't so crystal clear is whether AOL really paid too much for Time Warner, given that AOL used its own inflated share price to buy Time Warner's inflated stock, he said. It was simply a case of using one inflated stock to buy another inflated stock, said Harrington. AOL's monumental charge is being taken under new accounting rules for goodwill, which went into effect at the start of the year for most companies. Under those rules, companies don't have to write off goodwill on a quarterly basis. Earlier, companies would write off goodwill and other intangible assets such as brand names and patents over the life of the asset -- often as many as 40 years. Goodwill is the difference between the price paid for an acquired company and the fair value of the company's assets. But now companies can leave the goodwill on their books untouched unless that goodwill drops in value, or becomes impaired. The flip side of the coin for goodwill-laden companies is that they now have to test whether the goodwill on their books is worth its recorded value, at least on a yearly basis. That has raised the specter of huge write-offs, such as the one that AOL just announced, particularly for telecommunication and technology companies that went on an acquisition spree during the heyday of the Internet boom. SOURCE OF JOY At first, not writing off goodwill each quarter appeared to be a bright spot for many companies, since the periodic write-downs of goodwill take a hefty bite out of profits. Indeed, the same rules that are forcing AOL to take the whopping charge now were a source of joy just a few months ago. In August, for example, AOL said it expected profits to shoot up by as much as $5.9 billion each year under the new rules. The new rules by themselves are hardly the source of most goodwill charges, however. After the Internet stock bubble burst, companies were writing off monstrous goodwill amounts on their books even before the new rules came into effect as they cleaned up their balance sheets. For example, fiber-optic components supplier JDS Uniphase Corp. (JDU.TO) unleashed a $38.7 billion quarterly charge last year to write off goodwill. Nortel Networks (NYSE:NT - news), the world's largest maker of telecommunications gear, was another company that threw a hefty charge on investors. It wrote off $12.4 billion in goodwill in a second-quarter charge last year. But unlike JDS Uniphase's gargantuan charge, the response from the stock market to AOL's charge is likely to be muted as the market begins to absorb more and more such charges, said Harrington. Ironically, in the mid- to late-1990s, AOL was a leading lobbyist on Capitol Hill arguing in favor of so-called ``pooling of interests'' accounting that allowed it to immediately write-off the purchase price of stock acquisitions. This then-perfectly legal accounting loophole prevented AOL from having to report a continuing drag on profits that would have resulted from writing off the purchase price over several years. But the world's biggest Internet services provider was one of several high-tech companies to come under fire in 1998 by the U.S. Securities and Exchange Commission (news - web sites) for what the agency said was aggressive use of such accounting practices. While the agency's move reigned in AOL at the time, the latest write-off stems from pushing up against the limits of these same merger accounting policies. (additional reporting by Eric Auchard)

To: Jim Willie CB who wrote (45890)	1/7/2002 9:55:04 PM
From: Dealer	Read Replies (1) \| Respond to of 65232

JW....Just throwing this one at ya!! DCTM---I am not in this stock.....picked up from another thread......found the chart and the following News releases interesting...... web content management space???????????????? Very interesting chart: stockcharts.com[h,a]daclyyay[pc5!c8][vc60][iLp14,3,3!La12,26,9] Documentum Appoints Michael DeCesare to Lead Worldwide Sales Former Oracle Sales Executive to Drive Global Opportunities biz.yahoo.com At the least it might make me take a good look at ORCL. :-) dealie