guy keren <[EMAIL PROTECTED]> writes: > On 30 Jan 2003, Oleg Goldshmidt wrote: > > > Eli Marmor <[EMAIL PROTECTED]> writes: > > > > > Not yet slashdotted: AOL removed $45.5 billion in the last quarter. > > > > > > Total loss in 2002 was $99 billion. > > > > > > A new world record. > > > > Well, IIRC in September 2000 Intel lost $91 billion in one > > day... > > you surely realize these are not losses 'in one day'. the stock value of > the company (or of its holdings) dropped over a period of time, and in > their reports for a given quarter, they decided to adjust their 'reported > money worth' to (part of) this drop in stock prices. thus, this is loss > just 'on paper', much like it was a gain just 'on paper' when the stock > prices shot to the skies.
It was a loss in one trading day. If you were to buy (the whole of) Intel in the morning and sell it in the evening you would have lost 91 billion dollars (wrong, of course - you would be a market maker for Intel then). Think what you may of stock prices, they reflect what the markets think of how much a company is worth, which is just about the only half-reasonable notion of value there is. I did not quite understand the "they decided" in what you wrote - they do not decide what their stock is worth. Of course, you can arbitrarily choose a period of time that includes that one trading day to change the rate of profit/loss by a rather wide margin. You can do the same or similar to the 99 billion of AOL/TW, too. Actually, IIRC, in that particular case (Intel again) there were no "real losses" in your definition. On that day (or maybe the day before) Intel reported that their European sales grew by a few per cent in the previous quarter. The problem was, the world was expecting higher growth. That expectation was of course reflected in INTC stock price (if you look at the graph, there was a sharp rise before that drop). This is identical to the situation with AOL/TW, in principle, but on a much shorter time scale. > ofcourse, companies often use this opportunity to hide their real losses > (most likely a few hundreads of millions of dollars, or a few 10s of > millions) - but these numbers are quite small relative to the 'net worth' > loss of the company, so nobody looks at them when they can shout 'hei, > they lost billions of dollars the last quarter!'. Oh, 91 billion dollars was probably about half of Intel's worth (I don't remember, guessing wildly). Another tidbit I am pulling from memory is that if you took out 29 biggest US companies the rest of the (private) US economy was not worth that much on that day... -- Oleg Goldshmidt | [EMAIL PROTECTED] ================================================================= To unsubscribe, send mail to [EMAIL PROTECTED] with the word "unsubscribe" in the message body, e.g., run the command echo unsubscribe | mail [EMAIL PROTECTED]
