5 ms·

There is no such thing as intrinsic value. There is price and price ($16B) is determined by the market. Talking about PE and multiples is pointless for tech co

There is no such thing as intrinsic value. There is price and price ($16B) is determined by the market. Talking about PE and multiples is pointless for tech companies where synergies and rapid adoption/changes are common.

fauigerzigerk 10y ago
>There is no such thing as intrinsic value Intrinsic value usually refers to the present (discounted) value of future earnings. >There is price and price ($16B) is determined by the market. How is it determined if all valuation is supposed to be pointless? >Talking about PE and multiples is pointless for tech companies where synergies and rapid adoption/changes are common For a public company that has existed for almost two decades it absolutely makes sense to consider revenue multiples among other factors. It may well be that the value of the company in Intel's hands is worth more than it is worth for other, non-strategic, investors. I agree that there is a lot of potential variability in tech, but that doesn't mean any fantasy price is right just because some people buy some shares at that price (which is what market prices mean)
- deleted 10y ago
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bhouston 10y ago
> There is no such thing as intrinsic value. There is price and price ($16B) is determined by the market. "Intrinsic value" is a basic financial term that is widely used and has a well defined meaning - just type the term into Google: https://en.wikipedia.org/wiki/Intrinsic_value_(finance) https://en.wikipedia.org/wiki/Intrinsic_value_(finance)
samfisher83 10y ago
Worst case in a few years they can write down 16 billion or some amount and they can lower their taxes. Effectively the government will pay for part of the purchase.
- kgwgk 10y ago
  In the same way that the government pays for part of your salary?
  - samfisher83 10y ago
    More like tax credits. For example you can buy an EV and knock some money off your taxes. For example supposed a company makes 5 billion they have a 30% tax rate. They would owe 1.5 billion. Supposed they bought a company for 6 billion. They realized next year hey the company is really only worth $1 billion. They write off the 5 billion which offsets the 5 billion profits so instead of the paying 1.5 billion in taxes they pay 0. So government basically ended up paying 25% of the purchase price.
    - chronicx0 10y ago
      So... In the same way that the government pays for part of your salary?
    - kgwgk 10y ago
      They also deduct your salary (and every other cost of doing business) from profits. So government basically ends up paying 25% of your salary.

fauigerzigerk 10y ago

>There is no such thing as intrinsic value Intrinsic value usually refers to the present (discounted) value of future earnings. >There is price and price ($16B) is determined by the market. How is it determined if all valuation is supposed to be pointless? >Talking about PE and multiples is pointless for tech companies where synergies and rapid adoption/changes are common For a public company that has existed for almost two decades it absolutely makes sense to consider revenue multiples among other factors. It may well be that the value of the company in Intel's hands is worth more than it is worth for other, non-strategic, investors. I agree that there is a lot of potential variability in tech, but that doesn't mean any fantasy price is right just because some people buy some shares at that price (which is what market prices mean)

deleted 10y ago
[deleted]

bhouston 10y ago

> There is no such thing as intrinsic value. There is price and price ($16B) is determined by the market. "Intrinsic value" is a basic financial term that is widely used and has a well defined meaning - just type the term into Google: https://en.wikipedia.org/wiki/Intrinsic_value_(finance) https://en.wikipedia.org/wiki/Intrinsic_value_(finance)

samfisher83 10y ago

Worst case in a few years they can write down 16 billion or some amount and they can lower their taxes. Effectively the government will pay for part of the purchase.

kgwgk 10y ago
In the same way that the government pays for part of your salary?
- samfisher83 10y ago
  More like tax credits. For example you can buy an EV and knock some money off your taxes. For example supposed a company makes 5 billion they have a 30% tax rate. They would owe 1.5 billion. Supposed they bought a company for 6 billion. They realized next year hey the company is really only worth $1 billion. They write off the 5 billion which offsets the 5 billion profits so instead of the paying 1.5 billion in taxes they pay 0. So government basically ended up paying 25% of the purchase price.
  - chronicx0 10y ago
    So... In the same way that the government pays for part of your salary?
  - kgwgk 10y ago
    They also deduct your salary (and every other cost of doing business) from profits. So government basically ends up paying 25% of your salary.