BloggingStocks http://www.bloggingstocks.com BloggingStocks http://www.blogsmithmedia.com/http://www.bloggingstocks.com/media/feedlogo.gif BloggingStocks http://www.bloggingstocks.com en-us Copyright 2012 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/<![CDATA[Sprint may write off $31 billion on Nextel acquisition]]>http://www.bloggingstocks.com/2008/02/01/sprint-may-write-off-31-billion-on-nextel-acquisition/http://www.bloggingstocks.com/2008/02/01/sprint-may-write-off-31-billion-on-nextel-acquisition/http://www.bloggingstocks.com/2008/02/01/sprint-may-write-off-31-billion-on-nextel-acquisition/#commentsFiled under: , ,

It looks like Sprint's (NYSE: S) 2005 merger with Nextel Communications will end the way that a disturbing number of mega-deals end: with a massive write-off.

Sprint announced yesterday that it may write off as much as $31 billion related to the deal -- a move that could eliminate all the goodwill the company recorded for the merger.

The write-off would be far larger than the headline-making subprime-related moves that derailed shares of the major banks. But shares of Sprint didn't budge on the news.

Why? It's already well-known that the Nextel deal was an unmitigated disaster. The goodwill may still be on the balance sheet but it has no value. It's an asset that everyone has already written off mentally.

Sprint said that the charge wouldn't affect the company's cash position or effects its deals with lenders.

The deal for Nextel cost Sprint $35 billion, meaning that the company completely wasted at least $34 billion of that amount, and everyone can already tell less than 3 years after it went down. That has to make it one of the worst M&A moves in history.

Hey, at least they didn't buy WorldCom.

Sprint may write off $31 billion on Nextel acquisition originally appeared on BloggingStocks on Fri, 01 Feb 2008 09:19:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>acquisitionsdealsinthenewsmergersnextelSSprinttelecomwrite-offsFri, 01 Feb 2008 09:19:00 EST<![CDATA[Why is Wall Street rewarding write-offs?]]>http://www.bloggingstocks.com/2007/10/09/why-is-wall-street-rewarding-write-offs/http://www.bloggingstocks.com/2007/10/09/why-is-wall-street-rewarding-write-offs/http://www.bloggingstocks.com/2007/10/09/why-is-wall-street-rewarding-write-offs/#commentsFiled under: , , , ,

MarketWatch's David Weidner got a nice quote from Punk Ziegal & Co.'s Dick Bove that pretty much sums up my reaction to the recent round of subprime write-offs, and Wall Street's reaction:

"This is a reason to sell not buy. The theory that if the company writes off $2 billion it should see its stock price up $1 and if it writes off $6 billion the stock should jump $3 is not one I can embrace."

Yes! Exactly! Another thing that investors should be wary of is the possibility that some of these firms are engaging in cookie jar accounting: taking aggressive write-offs so that they can book windfall profits when the securities in question rebound. Given that Wall Street is rewarding terrible results from the big banks this quarter, this would have to be tempting.

In just a few months, an interesting shift has taken place in terms of how investors are viewing these write-offs. First, everyone was whispering that the banks weren't going to take big enough write-downs for fear of seeing their stocks get pummeled by big losses. Then, when this rumor had circulated, the banks responded with huge write-offs -- and the the Street cheered their honesty. But now we're wondering just how honest they were really being.

Why is Wall Street rewarding write-offs? originally appeared on BloggingStocks on Tue, 09 Oct 2007 14:25:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>banksDavid WeidnerDavidWeidnersubprimewrite downswrite-offsWriteDownsTue, 09 Oct 2007 14:25:00 EST