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.

Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Mark Peterson CPA who wrote (110562)	3/22/1999 9:50:00 AM
From: Eggolas Moria	Respond to of 176387

The multiple professionals will accord to earnings from derivatives trading is quite a bit lower than the multiple they will grant on operating earnings. Quite a bit lower.

To: Mark Peterson CPA who wrote (110562)	3/23/1999 12:21:00 AM
From: Mike Gordon	Respond to of 176387

Mark: Sorry for the late response. Your remark "if it were to involve some merger of operations in whatever form, the valuations IMO would probably exclude realized derivative profits as some form of nonrecurring activity." I am not a professional accountant, however I believe the valuation of a company should be viewed from its' continuing operations including predictable returns from assets. Derivative profits are less predictable, unless specific assets are in place which have a history of consistent returns. If I were to evaluate DELL, as in IBM's case, I would discount any amount in the EPS that didn't have a direct link to Dells primary operations. JMHO.

To: Mark Peterson CPA who wrote (110562)	3/23/1999 12:30:00 AM
From: Chuzzlewit	Read Replies (2) \| Respond to of 176387

Mark, I think you're missing the fact (I think it's a fact) that derivative profits (on the sale of puts on DELL and the purchase of calls for stock repurchase) aren't run through the income statement. They get posted directly to the paid in capital section of equity. That, at least is my understanding. The section in the income statement dealing with financing probably relates to the net income of short term investments, currency hedging, and interest expense associated associated with debt. What am I missing? TTFN, CTC