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.

Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: kumar who wrote (220639)	2/24/2007 4:10:34 AM
From: Elroy	Read Replies (1) \| Respond to of 281500

Compare VZ with HPQ - Hewlett-Packard. until recently ( probably 2002 timeframe), every acquisition HPQ made was with cash - no stock swaps. Thats an indication of a company that generates enuff money without worry of debt. I'd say that's more an indication that there stock was never particulary highly valued. If you have a PE of 50x its great to make acquisitions with stock because they're usually accretive immediately to your EPS. On the other hand, if the market doesn't give you a nice valuation, cash may be preferable since if you're at 10x and you want to acquire a company at 20x, its going to be dilutive. Regardless, neither is indicative that debt is a problem. As long as the USA can service the debt, it doesn't matter how much or how little there is. Its when tax revenues are not large enough to service the debt that problems may appear.