[benreesman]

There is a financial accounting line item called “goodwill” and it’s often non-trivial.

In a functioning market customers (whether consumers or enterprise purchasing decision makers) tell you to take a walk if you act with bad will in any kind of consistent way.

There isn’t much money to be made in markets that are both of “mature” and functioning.

[takinola]

Goodwill has a very specific definition that has nothing to do with your behavior. It is simply the difference between the price an acquirer pays for something and the book value of that thing

[benreesman]

TFA accurately cites a decrease in cap on the day over a revelation of bad behavior, in no way affecting fundamentals. That comes out of goodwill.

Why do people say things like this?

[takinola]

Goodwill only comes into play in the context of an acquisition. Unless they are being bought, the decrease in market cap is just that. It doesn't come out of anything in particular, accounting-wise.

[benreesman]

Price is definitionally attached to the likelihood of a transaction! The “price” of something is perfectly defined at the moment of a transaction, at any other time it is at best a rough estimate of the consensus of an amount at which a transaction would occur.

I’m not nitpicking: this a la carte treatment of market capitalization neatly severed from what anyone would be willing to pay, warped by the prospect of intervention and other insidious capture is why we’re discussing this embarrassing cavalcade of depressing behavior on the part of the executives in the first place.

Goodwill isn’t germane only to risk arbitrage discussions, it is (among other things) how the accountants keep track of the impact on value that accrues to piece of shit finance guys pulling stunts like this one.

[gweinberg]

In accounting, "goodwill" has a specific definition which takinola correctly gave. It is IMO poorly named, since it has nothing to do with what "goodwill" means outside of accounting. The amount of "goodwill" a company has on its books has nothing at all to do with what a layman would think of as "good will".

[TheCoelacanth]

How does the bad behavior have no effect on fundamentals? Their own SEC filings claim that it is essential to the company's success.

> Meeting the increasingly diverse needs of Wells Fargo’s global customer base is critical to our company’s long-term growth and success.

[lazide]

Why do folks say things like what you’re saying?

Goodwill has a meaning which isn’t related to market cap due to a bad news day.