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

To: Art Bechhoefer who wrote (114650)	2/27/2002 3:54:56 PM
From: carranza2	Read Replies (1) \| Respond to of 152472

I was being a bit facetious. The underwater options are anti-dilutive, so they can be seen (by the bloody minded, like me) as enhancing shareholder value because compensation which was otherwise payable did not and may not get paid, a savings. Not that I think Q employees shouldn't get paid. They should be generously rewarded for doing one hell of a good job. Unfortunately, in the present market, the ones who get rewarded are those who were fortunate enough to be on the ground floor and had options issued to them early in the game. The employees who got options based on 1999 stock prices seem to be out of luck, despite having made terrific contributions, too. Perhaps the compensation trend will now be geared to more cash and less options. I'm sure this is a difficult problem for whoever is responsible for planning Q's compensation scheme.

To: Art Bechhoefer who wrote (114650)	2/28/2002 3:44:13 AM
From: puzzlecraft	Read Replies (2) \| Respond to of 152472

Even with the shares not being included since the stock is currently priced under the option strike price, there has been a lot of dilution going on. Three years ago, QCOM reported 74.2 million diluted shares for their first quarter. This year 809.5 million. Backing out the 2/1 and 4/1 splits, that's a 36.4% increase in the number of diluted shares over three years, or about 11% annually. That kind of continued annual dilution will significantly impact shareholder value if forward revenue growth remains under, say, 25%.