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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting
QCOM 155.82-1.3%Jan 23 9:30 AM EST
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To: Wyätt Gwyön who wrote (22230)5/6/2002 11:53:28 AM
From: slacker711  Read Replies (1) of 197350
 
Slacker, any thoughts on the Pegaso sale? sounds like an incremental positive if QCOM stops financing carriers in places where you can't drink the water.

The Pegaso sale is absolutely huge....though it was already discounted since the beginning of March. I hate to think what the market would have done to Qualcomm if they had had to write off another $650 million.

OTOH...it is sort of ironic, but the early payment of the debt by Telefonica is probably a net negative (but not surprising). The debt comes in several different parts and it's pretty probable that Telefonica is going to pay off the highest yielding portion. It wouldnt have been bad to be getting paid 20% interest by a company with an 'A' debt rating....but I guess this was probably never going to happen.

So....in sum, the resumption of interest on the debt is going to narrow the gap between GAAP and pro-forma but not as much as it once would have. Pro-forma should benefit by a minor amount since the interest on the cash will be included in that number.

Most importantly, the $650 million is no longer at risk.

Buy back some shares!!!

Slacker
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