Going Way Down in History
It's been a year for huge lawsuits (Enron) and huge losses (AOL). AOL Time Warner, the world's largest Internet and media company, posted first quarter net losses of $54.2 billion -- among the largest in corporate history.
Ironically, the media giant was still able to whitewash some good out of the bad with the press, regardless of its buckets of red ink. A simple accounting rule adjustment that took effect this year changed the complexion of the matter completely. The change allowed AOL Time Warner to recognize the amount they overpaid for its acquisition in a lump sum rather than expensing the charge over time.
Because the loss was a non-cash charge, investors were expecting it. The reaction of Wall Street was also a tired nod. Just another history-making day in the good ol' U.S. of A.