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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 174.58-1.2%3:59 PM EST
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To: alburk who wrote (114121)2/23/2002 11:16:59 AM
From: Stock Farmer  Read Replies (3) of 152472
 
No need to apologize. The more the merrier.

Me personally, I fully understand the concept that a growth company spends to grow the franchise and does not show the rate of profits that it otherwise would show in steady state.

And I understand that Qualcomm has purchased slices of CDMA customers the world over. And I even understand why they are doing this. Despite the fact that some of them have cost shareholders dearly.

I even understand wireless and wireless technology. At least to the point that my little knowledge makes me dangerous. And that the primary strategy is aimed towards mass adoption of CDMA2000 3G technology.

I also understand other things. Like that a growth company is expected to grow. Bigger tomorrow than it was today. And yes, we are supposed to give it time. And some franchises take longer to build than others. And that telecommunications franchises are amongst the longest of the long.

And I understand the value of a patent portfolio. Particularly one that straddles a key technology crossing point.

All of these things I understand. As a technology guy, as an executive, and as an individual with my ear to the ground.

And yet with all this being said, I do not wonder why the market is pounding the price.

For plainly stated, the company is not as profitable as it appears to be. It isn't profitable at all, actually. And while it is reporting accounting profits, it is actually consuming shareholder wealth at a greater pace.

So there you have it. The promise in one hand, the profits in another. That is the essence of the debate.

And the balance that is the market is tipping from promise to profit.

No doubt about that.
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