Summary
The author relates his experience on his trip down memory lane recalling and updating the dumbest and most expensive merger of the 21st Century. The merger with AOL was announced in 2000 and was touted as a $183 billion merger based on the price of AOL stock at the time. But, by the time the merger went through in Jan 2001, AOL stock had collapsed and the value of the AOL stock was about half what it was when the "$183 billion" deal was first announced breathlessly by the US' financial press. Despite the drop in the price of AOL stock, the media continued to refer to the deal as $183 billion. The company earned $6.552 billion or $1.57 a share last year compared with $2.671 billion or 57 cents a share in 2005. On Time Warner's stock, it has been trading in the high teens and low twenties recently, but it could pick up if profits continue to grow.
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Extract
Hey, Dad
"Hey, Dad, what ever happened to Time Warner? I remember they had the biggest merger in history joining up with AOL and then the thing seemed to fall apart and they had to write off skillions of dollars and even drop the AOL name. What's happening now?"
"Funny you should ask. It just so happens that I've been reading the latest annual report from the company and it ...See the full content of this document
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