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

To: Maurice Winn who wrote (125047)	11/6/2002 10:06:57 PM
From: Stock Farmer	Read Replies (1) \| Respond to of 152472

Interesting Mq. You see the same thing I do and chortle with glee. I am merely extrapolating forward on two fronts. On the first front, I am postulating that a 7% royalty on exports will indeed be paid to Qualcomm! It will indeed exist!!! Chinese companies will honor their contracts and pay the agreed upon royalties with much bowing and nodding on a monthly basis. With the check made out to Qualcomm China LLC. Which will dutifully report near 100% margins back to parent Qualcomm Inc, which will selflessly cause this profit to float to the top line. Anyway, yes, Qualcomm will REPORT this revenue and these profits and shareholders will be happy. And you will cavort with delight (you seem to do so anyway, so that's a safe bet). Unless and until they get some crazy idea about having some of those riches end up on a dividend check. Oops. You see, not a dime of real money will flow from Qualcomm China LLC to Qualcomm Inc. Instead, that real money will circulate around within Qualcomm China LLP and be used to finance local operations and investment in local industry and local wages. All as a consequence of series of caveats, covenants, conditions and contracts of byzantine complexity that will be prerequisites to the existence and operation of Qualcomm China LLC. So take your 7% and prepare to enjoy it from behind a sheet of glass. It will be there, but shareholders will never touch a dime. On the second front, that flood of cheap exports from China, (not ACTUALLY earning shareholders a dime) will compete quite favorably with less cheap global manufacturing that does actually earn shareholders a dime. Thus wiping out real shareholder wealth creation and replacing it with phantom shareholder wealth creation. BREW, Graviton, Eudora... all sucked into the same vortex. Oh, it will all look good on paper. But like Connan Doyle's original reference, it is a dangerous 7% solution. If you are a shareholder. John