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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: Kayaker who wrote (88258)	11/26/2000 7:02:54 PM
From: waverider	Respond to of 152472

I assume you are discussing the actual spin off which was last planned later in 2001...I think late spring/early summer. The IPO will not have any effect on your number or value of Q shares since all that is happening is that Q is getting cash for a partial sale of ownership...but I think you know that. As for the spin off, you will be getting a number of Spinco shares based on your QCOM shares. Your Q shares will not be reduced but their value will go down in relation to the Spinco value taken away. The LWIN spin off was handled the same way. We got 25 shares of LWIN per 100 of QCOM. If you have long term options, I suspect they will be handled the same way as in the past. The pre-spin off options will have the Spinco shares attached. If there are any QCOM splits between then and expiration, the options will most likely not split, but have their exercise price reduced and the number of shares per option increased from the traditional 100 shares per contract. Hope this helps...and I assume this kind of question is going to come up again and again as we approach the spin-off. Rick

To: Kayaker who wrote (88258)	11/26/2000 7:12:33 PM
From: Don Lloyd	Read Replies (1) \| Respond to of 152472

Kayaker - ...So after the spin-off, I would have a certain number of Spinco shares. Any idea what is most likely to happen with the QCOM shares? In my example, 1000 shares of QCOM at 120 before the spinoff would become 900 shares at 120? Or would I still have 1000 shares at a price of 108? (120 less 10%). The reason I ask is that I have a Canadian tax free retirement account (RRSP) that is allowed 25% (soon to be 30%) foreign content based on the book value of the shares. Hopefully this won't adjust the book value up. No, the initial spinoff will only be for about 10% of the issued shares in the spinoff. You will still have 1000 shares of QCOM. For the QCOM price to fall by $1 per share due only to the separation of the spinoff assets, about $750M would have to be the value of the 10% spinoff, or $7.5B would have to be the total valuation of the spinoff. In practice, the market is unlikely to make a rational calculated valuation, but its valuation is the only one that counts. I wouldn't expect the total book value to necessarily change. Regards, Don Edit - I see that all my explanations were incorrectly for a situation that the 10% spinoff was distributed to shareholders when in fact they will be sold to the public. Ignore my explanations. -g-