I agree. Here is another take on this issue.
http://www.jewishworldreview.com/cols/williams041702.asp
Denys
-----Original Message-----
From: HP-3000 Systems Discussion [mailto:[log in to unmask]]On Behalf Of
John Lee
Sent: Thursday, May 02, 2002 3:46 PM
To: [log in to unmask]
Subject: Re: SKC Morphs Again... We're Now SKHPC
At 03:00 PM 5/2/02 -0500, Denys Beauchemin wrote:
>Leave to Wirt to obfuscate the readers (must be a defect that comes from
>reading the New Yuck Time). I would suggest he and you take a quick look
at
>some news stories about this AOL Time Warner loss. I take here from one at
>random:
>
>http://www.wired.com/news/business/0,1367,52090,00.html
>
>The headline reads: AOL Has Huge Loss; Shares Rise.
>
>Reading the story explains the dichotomy.
>
><snip>
>Sound too strange to be true? Blame it less on bean-counting wizardry at
AOL
>Time Warner (AOL) than on an accounting rule change that took effect this
>year. The change, enacted by the U.S. Financial Accounting Standards Board,
>requires companies to recognize the amount they overpaid for acquisitions
in
>a lump sum, rather than expensing it over time.
>For AOL Time Warner, which agreed to acquire the assets of the Time Warner
>media empire at the peak of the bull market in 2000, the rule change
>resulted in heavy red ink.
>For the first three months of the year, AOL posted a jaw-dropping net loss
>of $54 billion. The figure, the company said, "primarily reflects the
>decline in the company's stock price" since the Time Warner acquisition was
>announced in early 2000.
>Because the loss was a non-cash charge, and also because investors were
>expecting it, the reaction on Wall Street was fairly blase.
>Shares of AOL Time Warner actually rose in after-hours trading Wednesday,
as
>investors largely ignored the charge. They focused instead on the
>slightly-better-than-expected quarterly performance of the company, whose
>stock has taken a beating for most of the year.
>Overall, the company reported sharply higher returns compared to a year ago
>in its cable, film, and Internet access businesses. Those gains were offset
>partially by lower Internet ad sales. Revenue for the quarter in all
>divisions totaled $9.8 billion, slightly ahead of the $9.5 billion
consensus
>estimate among analysts surveyed by Thomson Financial/First Call.
><snip>
>
>Need we say more.
Yes, I have to say one more thing. All of what you say could well be true,
but their still exists a large loss and some feel that these "paper" losses
are widespread among companies and hidden by accounting practices. And if
factors contributing to these "paper" losses don't change, then the "paper"
losses become very real losses to the owners of the company (i.e., the
stockholders, who all along trusted management to protect their investment).
John Lee
HP Account Executive
Vaske Computer Solutions
Minneapolis, MN
952-844-0054
We sell, service, support and integrate HP 3000/9000 and related hardware,
new and old, since 1988
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