1982: Acquisition, paid with stock In this letter, Warren Buffett talks about acquisitions and how a company pays for it. Whenever you buy something, the best value you can get is when you pay as close as possible to the intrinsic value of what you are buying. There are several reasons for a company to make an acquisition which usually depend on the kind of management that intends to make an acquisition. A company may want to expand its empire and may be ready to pay much over the intrinsic value of a company which is being bought just for the sake of mindless expansion. Such expansion is in no way good for the investors of the company. Another kind of management may just be acting reckless in a euphoric business environment and want to extend into businesses where it has no business to be in. Such companies irrespective of the value it may pay for a company being bought have a high tendency of resulting in heartbreak. Indian corporate throw up examples like Videocon to substantiat...