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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 154.29-3.2%2:56 PM EST
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To: Clean who wrote (11007)6/1/1998 3:17:00 PM
From: Gregg Powers  Read Replies (2) of 152472
 
Don't get me wrong, I think that management's first and foremost responsibility is to maximize shareholder value. I simply don't want to give away my asset.

When we talk about QC's recent "lackluster stock performance" its easy to forget about the Asian crisis and the impact that Korea has had on the company's near-term P&L. On the other hand, I thought I just pointed out how important the company's IPR is to current and next generation wireless telephony. In my mind, it would be criminal to sell the company now, when results are suffering the full weight of the Asian crisis.

Think about it this way. Nothing that has transpired in Asia has permanently impaired Qualcomm's economic opportunity in the region. Spending may be deferred--for how long nobody knows--but wireless telephony will continue to expand its role within the communications sector for the foreseeable future. Therefore, as far as I am concerned, nothing has changed within regard to the merit of our QC investment beyond a modest adjustment in timing. As I suggested before, that is the arbitrage that an acquirer may understand at the expense of the company's current shareholders.

Unfortunately, I agree that most shareholders would jump at the chance to get cashed out in the $80s--that's exactly my point. Some people's short-term desire to make a quick buck could deprive us of a world class long-term investment. Greed is a powerful thing, and most investors seem to prefer "present consumption" to "future consumption". That being said, I still regard such an outcome as grossly suboptimal.

Best Regards,

Gregg
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