Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 171.54

+0.4%

Nov 10 3:59 PM EST

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To: gdichaz who wrote (118925)	5/18/2002 7:16:38 PM
From: Art Bechhoefer	Read Replies (1) of 152472

Chaz, regarding a direct purchase plan for shareholders, that works only if there are shares on hand, not if new shares must be issued. A new share offering to the public requires registering the shares with the SEC, and all the expenses connected with that. In the past, when QCOM wanted to sell new shares, they chose a more efficient and economical method of private placement of convertible preferred shares, avoiding registration costs, and also avoiding dilution of existing shares until the preferred was actually exchanged or called. As to a buyback, that assumes that there are no better returns available than buying back shares at existing prices. In fact, the kinds of investments QCOM has been making suggest a much better long term opportunity cost than a share buyback. Buybacks are generally effective only in mature industries, where the stock price is momentarily low, and where there is sufficient cash flow to allow a buyback. Recent example: Goodrich Aerospace. Art

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