Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 170.90

-1.3%

Nov 7 9:30 AM EST

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To: Art Bechhoefer who wrote (118908)	5/17/2002 9:34:52 PM
From: KyrosL	Read Replies (2) of 152472

Art, I don't dispute that QCOM has done very well for those that bought it before mid-1999. All I am saying is that the bulk of its tangible book value, primarily its cash pile, was derived from stock sales, both from the original IPO and secondary offerings (remember the one in 1999?) as well as option exercises by its employees. As a business QCOM produced relatively little tangible wealth (i.e. retained earnings.) per share of its stock. Of course, its intellectual property and engineering expertise may produce lots of tangible wealth in the future, and its investments in various wireless ventures may prosper. I agree that no large cap telecom stock did better than QCOM for its long term shareholders. But that was not the topic I was commenting on. My comment was specific to your idea that a good measure of QCOM's performance as a business would be to look at the change of its book value from year to year. I simply pointed out that such a measurement is meaningless for a company whose employees receive and exercise lots of stock options and which has a large price to book ratio. Perhaps a more meaningful measurement is retained earnings per share. Kyros

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