Comment on I Convinced HP's Board to Buy Palm for $1.2B. Then I Watched Them Kill It in 49 Days
Revan343@lemmy.ca 1 week agoLol, I hope they bought it back for less than they originally sold it for
Comment on I Convinced HP's Board to Buy Palm for $1.2B. Then I Watched Them Kill It in 49 Days
Revan343@lemmy.ca 1 week agoLol, I hope they bought it back for less than they originally sold it for
lennivelkant@discuss.tchncs.de 6 days ago
I believe that’s what a write down generally reflects: The asset is now worth less than its previous book value. Resale value isn’t the most accurate way to look at it, but it generally works for explaining it: If I bought a tool for 100€, I’d book it as 100€ worth of tools. If I wanted to sell it again after using it for a while, I’d get less than those 100€ back for it, so I’d write down that difference as a loss.
With buying / depreciating / selling companies instead of tools, things become more complex, but the basic idea still holds: If the whole of the company’s value goes down, you write down the difference too. So unless these guys bought it for five times its value, they’ll have paid less for it than they originally got.