AOL Time Warner reported its 4Q2002 results today. Cash flow looks pretty good. Revenue’s pretty good. Margins are pretty good.
One thing, though. The company wrote down $44.6 Billion (roughly $10 per share), mostly in goodwill. This is in addition to the $54 Billion it wrote down in 1Q 2002. One hundred Billion dollars in shareholder value evaporated from AOL Time Warner in a year — value that, in truth, wasn’t really there to begin with.
“Fraud” is probably too strong a word to decribe the merger, because AOL was worth what AOL was worth; the Market said so every day by trading its stock where it did.
But wow. $100 Billion gone. (Just so you know, Parker Brothers prints only $50 Billion in Monopoly money a year. Let me repeat that: AOLTW’s writedown this year is two years worth of Monopoly money.)
And Ted Turner’s had enough. Turner, the company’s single biggest stockholder, quit the board today. I’ve got to believe he’s fixing to sue someone. Too much of that $100 Billion was his for him to sit still.