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Technology Stocks : Aware, Inc. - Hot or cold IPO? -- Ignore unavailable to you. Want to Upgrade?

To: Scrapps who wrote (3157)4/1/1998 9:18:00 PM
From: dougjn  Read Replies (1) | Respond to of 9236
 
Pooling allows the acquiror to avoid having to write off the premium portion of the acquisiton price against earnings over a period of time.

Purchase accounting (the other binary alternative in acquisitions) requires the reverse. Writeoff of goodwill (i.e. premium of acquisition price over book value) over a period of time. Depresses earnings per share, the life blood of stock valuation, for years.

Doug



To: Scrapps who wrote (3157)4/2/1998 12:59:00 AM
From: David Lawrence  Read Replies (2) | Respond to of 9236
 
My opinion is that Aware would not be a significant enough purchase for Lucent to worry about getting pooling treatment. They would just account for it as a purchase. As I recall, they handled Octel in that manner, which was a larger market capitalization.

Also, I believe it is October before LU can qualify for pooling.


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