Skeeter, QUALCOMM is the best options player in town because they are only optioning their own stock, in which they are the ultimate insider. They know all the news that's fit to print, even before it's been printed. They know all the royalties, which they haven't ever published, though there has been leakage over various royalties.
Betting against QUALCOMM on the value of the Q is fraught with risk. QUALCOMM isn't pretending to be able to deal in Nokia, General Electric or other options. Just their own.
Since they actually want to buy their stock back, they might as well see if they can milk speculators who are prepared to sell the stock for a lower price than QUALCOMM thinks it's worth.
If the 'right' price right now is $34 a share, [QUALCOMM's purchase price recently], that will probably also be the average price, with ups and downs around that figure, with a gradual increase as the value of the company increases over the years. When the price is below that average, they might as well sell some put options to people who are prepared to sell for $20, $25 or $28 or the like. QUALCOMM will collect the risk premium and if they are lucky, also get to buy the stock at a lower price than they think it's worth right now.
Good luck to people betting against that. I don't believe Jon is right that QUALCOMM will be able to go on milking the put buyers, time after time after time after time after time. Even though there's one born every minute and casinoes rake it in, decade after decade. After a while, people will surely figure out what the stock is 'worth' and the amplitude of price movements will reduce. But then again, as casinoes show, there are hordes of people around the world willing to bet against the house.
QUALCOMM will define 'worth' and if they are right, they will be able to back that 'worth' with the profits they make each year and that worth will increase to the extent they can milk the put buyers. If they are wrong, then they don't understand their own business and have an over-inflated idea of its value.
QUALCOMM is gaining worldwide market share annually. In April 1996, the CDMA market share was zero [other than a few sales by Hutchison, Hong Kong, which we can ignore]. By the end of the year, it was still about zero [about 1 million sales].
So, from April 1997 to April 2003, the 160 million subscribers cdg.org were gained. 160 million is about 18% market share, especially if the actual handset sales are counted rather than subscribers, because CDMA handsets are being replaced really fast. The GSM replacement rate has [my guess] reduced as GSM has matured.
So market share has increased at something like 3% a year, or 4% a year over the last couple of years. Note that that means a % market share increase of about 20% a year. Which is not a bad market share increase for any industry.
Since GSM has peaked, analogue is dying, TDMA is losing, PHS is fizzling fast and 3G via W-CDMA is finally kicking into gear, we can expect the rate of gain of market share to increase, not decrease.
We gurus know this. Sometimes, we choose not to cast our pearls before swine. Not that you are a swine, but people do get tired of wanton naysayers who refuse to learn when facts are offered - all critics tend to get tarred with the same brush. That's unfortunate, because clever critics are the most valuable resource [after the creative geniuses and money suppliers]. They can point out peat bogs, quicksand and predators.
So, now you are informed by a registered international guru and can become a Qcommie card-carrying acolyte too.
Mqurice |
