KLXVER said:
Ryuu96 said:
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. |
You are down 100K no matter how you look at it. Doesnt matter if the house is worth 100K or not. The only way to make a profit is to sell the house for over 100K or rent it out and make the money back over time. |
No, I have a $100k house based on current market value (it may increase/decrease overtime) but I nevertheless have $100k worth of assets to my name. Like I said though the comparison isn't a 1-1 because ABK generates instant income while a diamond and house (depends) doesn't but it's a basic example of how cash is turned into assets, the only difference is the ABK assets starts generating income instantly.
It's not me being in debt by $100k, it's not me being down by $100k, and more than that, it's a long-term investment into my life, one which may potentially help me achieve things further in life, and yes I can rent it out and start generating extra income, just like Microsoft will instantly start making money off ABK automatically.
If I had say, $100m, I ain't worrying about buying a $100k house because I'm "down" 100k, Lol.
