Maurice we really agree on most things, especially regarding QCOM (though not regarding CO2).
This discussion has revolved around the issue of overcapitalization, the result of which is zero long term debt, an abundance of cash doing little in terms of return on investment, and relatively low earnings per share, owing to the huge number of shares.
The appropriate way to correct the imbalance is to buy up shares, even if it means taking on a little debt. The earnings per share would go up, leading to a higher stock price. Debt would return to manageable levels, and of course, the interest on the debt would be tax deductible. I would propose that at least one-third of the outstanding shares should be purchased, if not all with cash, then with some debt.
My points regarding Mirasol, Flarion, and FloTV are taken simply to remind shareholders that when a company makes an investment in technology, the cost is not merely the up front investment and the related R&D but the opportunity cost of investing the money elsewhere (as in allowing shareholders to invest the dividend increase in whatever is appropriate to their situation).
There is, as you have noted, a cost, perhaps even greater if another company acquires technology that can be used against its competitors. In that regard, Flarion is probably a worthwhile investment. But the longer it takes to implement LTE or other systems that make use of Flarion technology, the less return on the Flarion investment. You can't just sit on a Flarion investment and wait for the world to catch up.
Art |
