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Strategies & Market Trends : Galapagos Islands -- Ignore unavailable to you. Want to Upgrade?

To: Jorj X Mckie who wrote (24202)	1/31/2003 12:16:35 AM
From: mishedlo	Read Replies (1) \| Respond to of 57110

AOL - from EliasFardo a poster on the FOOL Since the merger between AOL and Time Warner was accounted for as a purchase of Time Warner by AOL, the annual letter to shareholders should be addressed to the previous AOL shareholders. The following is my suggestion: Dear fellow shareholders, The year of 2002 documented the wisdom of our corporate strategy. We, more than any other company, profited from the recent, unique market conditions. Your prescient management recognized an opportunity to trade your companies grossly watered stock for real assets. The $100 billion asset write-down in 2002 was a clear and convincing documentation of your managements' ability to both, see an opportunity to enhance shareholder value, and courageously act on such conviction. This was a banner year! Seldom before has a clever, well timed merger produced such results. In 2000, we recognized that the stock value of AOL was grossly overvalued. We also recognized that such insanity could not last forever. But what to do? We were not some small private dot.com that could simply go public. No, AOL was a large, established enterprise, and anything we could do to capture the ridiculous amount of water in our stock price required a big fish. And we found one. But it was not a fish. It was a big, slow, dumb whale. It was Time Warner, floating belly up, begging for the harpoon. (Dear shareholders, forgive me. I am too giddy to resist the metaphors.) And seldom before has such happy results been actually certified by a public accounting firm. This is the correct way of interpreting the $100 billion asset write-down taken in 2002: It represents the value transferred from the shareholders of Time Warner to the shareholders of AOL. Nothing that we could have done with our now, slowly wasting internet assets, could have added even half that much value to the shareholders of AOL. So, look not at this year's financial results as a source of regret, but as a cause for celebration. A $100 billion bonanza for you, our loyal shareholders.