KLXVER said:
I understand basic math. If I buy a big diamond, then yes, I own something worth millions of dollars. But if nobody buys it from me I just have a big useless paperweight. Its not that difficult. Assets means fuck all if you cant sell it. They have spent way more than they have ever made back. Im sure MS will make their money back at some point, but we are talking years and years. Its really easy, but whats the point of arguing with someone who just insults you. Take care. |
An even more basic comparison would be if I buy a house for $100k, I'm not in debt by $100k, I instead own a $100k house, I now have (roughly) $100k worth of assets to my name. I'd only go into debt if I spend more money than I have. Your point that Microsoft is somehow in debt for converting $69bn of their own pure cash into a $69bn asset (ABK) is not how any businesses operate when looking at M&As.
Microsoft has no intention of reselling ABK in the near future, but nevertheless it's cash they own which has been converted into an asset and said asset (ABK) both benefits other parts of the business and likely brings in more than the interest on the cash sitting doing nothing. Our house and diamond comparisons are worth less even because those two assets aren't generating us income like ABK would for Microsoft.
I'll say again, Microsoft Gaming is not suddenly -$69bn with ABK, Lol. It isn't how M&A's are looked at in the business world, not how profits are determined in the business world. Microsoft Gaming profits on a yearly basis based on the calculations of expenses made in that year and nothing more than that.
Bigger issue is how much debts the acquired company has, if the acquirer has the cash reserves and if not, where they're borrowing or what shares they're parting with. Microsoft is in a position to have over $100bn in cold hard cash so the ABK acquisition didn't need any borrowing, any share sales, and the only ABK debt they take on is $3bn and most companies are fine with taking on quite a lot of long-term debt.
Shit, barely any company would do acquisitions if this is how things were done, Lol.
