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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: DownSouth who wrote (28852)	7/26/2000 6:50:50 AM
From: pann1128	Read Replies (1) of 54805

RE: QCOM spinoff DS, Thanks for your tireless efforts here. I am not sure if anyone touched on this, but I always wondered about QCOM's insistence on having the same royalty rate regardless of how many patents were utilized by the licensee. Instead of licensing individual patents, they just issued licenses for groups of patents covering 2G, 3G etc. That arrangement obviously made the Spinco transaction very simple. Old licensees still have to pay QCOM royalty, while they need to x-license with Spinco. This also enables consistent agreements between old and new licensees. Was the QCOM management that prescient? If QCOM management foresaw this then their vision is mind boggling. The only thing unclear from the CC is how much money in the bank QCOM will get from this transaction. Someone did ask about possible dilutive effects of selling shares to the public by way of the IPO. QCOM did mention that the dilutive effects will be minimum, but no figures were given. Implication was that they were not doing it for the cash, but for strategic reasons. Even so, I guess QCOM+Spinco will come out with 1B to 2B in extra cash? Cheers, Piyush

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