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Technology Stocks : America On-Line: will it survive ...? -- Ignore unavailable to you. Want to Upgrade?

To: The Duke who wrote (11126)	8/26/1998 6:57:00 PM
From: Raymond	Respond to of 13594

Does the the Street really care how they account for the acquisition? I don't think it makes real difference whether they treats it as expense or good will. The latter reduces earnings to be reported later, but it's non-cash so it does not affect the financial performance of a company at all. If the SEC forces all companies to treats acquisition expenses as good will, then the Street will add the good will back into earnings when it values stocks. It's not unusual that companies with huge good wills are valued at high P/E. So why play the game of semantics here? That said, it appears that AOL's stock price is stalled for this darned writeoff/good-will game. I think it won't be long until more people put this thing behind and begin to jump in again. I, for one, just added some AOL shares today. Raymond