Let’s Say A Company Overpays For Another Company – What Typically

1.	Let’s Say A Company Overpays For Another Company – What Typically Happens Afterwards And Can You Give Any Recent Examples?
Answer» There would be an incredibly high amount of GOODWILL & Other Intangibles created if the PRICE is far above the fair market value of the company. Depending on how the acquisition goes, there might be a large goodwill impairment charge LATER on if the company DECIDES it overpaid. A recent EXAMPLE is the eBay / Skype deal, in which eBay paid a huge premium and extremely high multiple for Skype. It created excess Goodwill & Other Intangibles, and eBay later ended up writing down much of the value and taking a large quarterly loss as a result. There would be an incredibly high amount of Goodwill & Other Intangibles created if the price is far above the fair market value of the company. Depending on how the acquisition goes, there might be a large goodwill impairment charge later on if the company decides it overpaid. A recent example is the eBay / Skype deal, in which eBay paid a huge premium and extremely high multiple for Skype. It created excess Goodwill & Other Intangibles, and eBay later ended up writing down much of the value and taking a large quarterly loss as a result.

Let’s Say A Company Overpays For Another Company – What Typically Happens Afterwards And Can You Give Any Recent Examples?

Answer»

There would be an incredibly high amount of GOODWILL & Other Intangibles created if the PRICE is far above the fair market value of the company. Depending on how the acquisition goes, there might be a large goodwill impairment charge LATER on if the company DECIDES it overpaid.

A recent EXAMPLE is the eBay / Skype deal, in which eBay paid a huge premium and extremely high multiple for Skype. It created excess Goodwill & Other Intangibles, and eBay later ended up writing down much of the value and taking a large quarterly loss as a result.

There would be an incredibly high amount of Goodwill & Other Intangibles created if the price is far above the fair market value of the company. Depending on how the acquisition goes, there might be a large goodwill impairment charge later on if the company decides it overpaid.

A recent example is the eBay / Skype deal, in which eBay paid a huge premium and extremely high multiple for Skype. It created excess Goodwill & Other Intangibles, and eBay later ended up writing down much of the value and taking a large quarterly loss as a result.

Let’s Say A Company Overpays For Another Company – What Typically Happens Afterwards And Can You Give Any Recent Examples?

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