Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 183.28

+4.1%

3:27 PM EST

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To: Stock Farmer who wrote (114487)	2/26/2002 12:35:26 PM
From: engineer	of 152472

Ok, here is an IQ test for you. Example 1) You start a company and sell it to investors for $1M and sell 1M shares, but nobody (except the top 5 guys who formed the company) works at the company. You provide only cash bonuses and a pay rate that is way higher than industry because you can;t keep them unless you pay equivalent wages (which for other companis is cash plus stock) to the employees and watch them very carefully. You never dilute teh stock. the stock grows by 5% a year as these people perform well, but make no real gains. Your turnover rate is more than 5% and your top management and your best engineers keep using the place as a training ground before they go off and get a real job. Example 2) You start a company and sell it to investors for $1M and sell 1M shares, but set aside another 1M shares for stock options. You award stock options as a deferred compensation to the employees over time to work towards increasing their share. the options vest over 5 years. Now you tell hte employees they get alot of money if they make the stock go up and you pay equal or less to the employees than industry scale in cash wages. but you do not have to borrow cash or take on debt long term to pay the cash bonuses at the end of the year. Now the employees take this to heart and bring out top notch products, management stays in place and your turnover rate is way less than 2% year after year. You are able to fund alot more R&D with this retained cash and you soon have invented a few big products which sell well and you are able to bring them to market. So from this, your stock grows 2000% over 10 years. (from 1985 to April 1999) Now which one has a better STOCK PRICE for the investor in the long run? Which one has less REAL dilution? Which one has a much better long term goal and longer term staying power (i.e. no debt) ? Which one is just whinning about monday morning quarterback BS?

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