Bargain Purchuisse.

UBS to book ‘negative goodwill’ on Credit Suisse takeover

Tesla has said that it will advertise its cars for the first time, and I have a couple of problems with this. Firstly, how about the time Tesla allowed its roadster to be launched into space? That was kind of the biggest car commercial of all time. Secondly, would this new enthusiasm for advertising have anything to do with Musk’s purchase of Twitter and its requirement for advertising spend to keep the company afloat? Hmm.

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UBS to book ‘negative goodwill’ on Credit Suisse takeover

UBS projects it will realize a one-time profit of $34.8 billion relating to its acquisition of Credit Suisse from what's known as ‘negative goodwill’ or ‘bargain purchase’. This number would likely roil Credit Suisse shareholders as it represents the amount below book value that UBS paid for their shares.

This doesn’t tell the full story, of course. UBS also anticipates a negative financial impact of approximately $17 billion due to the acquisition – $13 billion from adjustments to the fair value of the combined group's assets and liabilities, and $4 billion to cover potential litigation and regulatory costs.

UBS has clarified that these figures are preliminary and could change significantly in the future. Any Credit Suisse shareholders that feel annoyed by the negative goodwill need only think about how much more annoyed they would be if they were bondholders.

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