While big enough to wipe out a quarter’s earnings, investors will likely shrug it off because it’ll merely be viewed as a one-time non-cash “accounting” event at a company with $58 billion in cash on hand, operating cash flow of $29 billion and a stock market value of $257 billion.
But the bigger issue is that it reflects a wave of overpaying during the merger frenzy of merger frenzies, when takeover activity in the U.S. peaked at an aggregate $1.2 trillion — as premium upon premium were paid for company after company. Mergers, in turn, helped drive the markets to new highs, fueling investment psychology in the process — just before the market collapsed.
