Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 157.80

+0.9%

Jan 22 3:59 PM EST

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To: Maurice Winn who wrote (122019)	7/24/2002 8:52:11 AM
From: Art Bechhoefer	Read Replies (2) of 152472

>>it makes sense to cut prices to fill capacity rather than shutting capacity<< Good point, Maurice, but there are more differences than similarities to the oil refiner price cutting in the 1980's. There were still enough refiners around to permit at least some competition. WorldCom is one of the largest, if not the largest service provider in some of its business segments. This is where I worry. If they cut prices ruthlessly to capture business, everyone suffers. With their debt load, or even half their debt load, they can't make money at the prices they need to charge to stay in business. Therefore, I conclude such price cutting, assisted by the lifting of debt, is predatory. It now appears that the major debt holders have decided that the total debt is simply too large for the company to stay in one piece. They will push for splitting off some of the parts and take their chances with the companies that acquire the assets (and the related debt). Meanwhile, it also appears that many of the customers will feel more comfortable with another service provider that may be in a better financial position to offer reliability and service quality. Art

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