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

To: JohnG who wrote (128838)	5/9/2003 12:27:32 AM
From: waitwatchwander	Read Replies (1) \| Respond to of 152472

A conspiracy of the size you dream is beyond the imagination of even the best hollywood producer? Try again and keep it simple this time. Suggestion: Think Bi$$, Cascade and a few friends.

To: JohnG who wrote (128838)	5/9/2003 2:01:46 PM
From: verdad	Respond to of 152472

And if ALL were true, it still doesn't mean QCOM shares are worth $30; in fact, those could all be very plausible reasons that the shares will eventually settle much, much lower.

To: JohnG who wrote (128838)	5/9/2003 2:06:22 PM
From: Dexter Lives On	Read Replies (1) \| Respond to of 152472

Message 18929057

To: JohnG who wrote (128838)	5/9/2003 8:21:38 PM
From: Jim Mullens	Read Replies (1) \| Respond to of 152472

Art, John. Carranza- Brokerage Research, “analysts” conflicts, bad press, etc- My 2 cents – 1. Re: Spitzer “Spitzer refused to do. There's probably a story there”. I read that Spitzer and Jim Cramer were Harvard classmates and that Spitzer was an investor in Cramer’s hedge fund. Funny, Cramer’s pump and dump calls on CNBC were never a focus. 2. I’ve read, from several on these boards, that it was common knowledge by most experienced “investors” that brokerage research was never to be trusted in the first place. I wish I had realized that earlier (gg). The brokerage houses apparently use their “research” to create trading which provides commissions, which is probably their main revenue source. This represent a clear conflict of interest to the investor (LTBH) vs the trader/speculator. It’s tough being in the LTBH camp when your investment shows 20% or more volatility swings at the drop of an “analyst” hat. I don’t see where this issue has yet been addressed by the SEC. In Qualcomm’s case, it appears to me that few of the ”analysts” are presenting fair and balanced research that looks at the long term scenario. According to Zacks, seven of the 13 analysts with 5 year growth estimates have estimates of 16% or less (industry avg 14%, sector 15%), only three with 30% or more. From the reports I’ve read few discuss in detail the long term case as they concentrate on only the current or next quarter. SSB has had a 10% LT growth estimate, yet inconsistently concedes that Qualcomm is the top player in wireless long term. From my observation, brokerage research is directed at short term events to facilitate trading activity, and as such this should be clearly stated in bold at the top of every research report. By not doing so, I don’t believe the brokerage houses have reformed at all. Further, my suggestion would be that all research be clearly labeled as for short term trading or long term investing. 3. Why does Qualcomm continue to get beaten up by the analyst community/ media? Why is Qualcomm/ CDMA misunderstood by the investing public? Possibilities/comments- a. Not all reports are negative, four analysts have strong buy ratings, and again three have long term growth rates of 30% or more. Problem is, the articles written (and CNBC coverage) seldom seeks quotes from these folks as they overwhelmingly stress the negative. b. Qualcomm/ CDMA companies do not advertise on the same scale as does the competition. Further, the CDG is very much smaller and has significantly less clout than the GSMA in terms of lobbying effort. A very subtle suggestion that “we will have to cut back on our advertising budget if our business does not prosper” could influence/flavor the balance of content in the articles. Perhaps why Qualcomm is seldom presented in a positive manner on CNBC is simply “they don’t advertise, we don’t promote”. Only recently, even most quotes from consulting firms such as Gartner were inaccurate and favoring the GSM position. Consultancy firms derive their revenue from folks in the industry thru seminar attendance and research publications. The fear of the GSM companies (which significantly out number CDMA- 10 – 1 ??) withdrawing support may very likely influence the content of the supposedly objective reports. I believe Eric has stated the Shoesteck was commissioned by the CDG to do a study on TDMA migration paths which happened to favor CDMA (Perhaps none would do an objective study which resulted in objective/ positive CDMA statements). I also find it interesting that Shoesteck has recently sent me several postal and email alerts of their upcoming seminar (perhaps the attendance is not developing from regular industry (GSMA) sources). c. Qualcomm is not known for large business dealings with the brokerage houses as most of its growth has been internally financed. Qualcomm doesn’t throw business their way, the brokerage houses don’t reciprocate. CSFB and I believe another house was found to be providing favorable research for exchange in kind. Perhaps part of the deal was to put out negative research on the competition. d. Qualcomm crossed up the “analysts” in November 2001 when it revised its accounting structure to the segmented approach. The guidance given in November was to the old method apparently unbeknownst to the “analysts” which required an embarrassing revision in forecasts only a month later. I believe it was an unintentional misstep by Qualcomm (they were chainging CFO’s at the time), but never the less an embarrassment to the “analysts” who should have, though their analytical skills, understood what was happening. Perhaps Qualcomm has not as yet earned their trust back. 4. Qualcomm/ CDMA represent a disruptive innovation of a significant magnitude to the incumbents in the industry (GSM/ TDMA companies). All known 3G mobile wireless solutions are CDMA based as CDMA will be the enabling technology for all things requiring a ubiquitous wireless mobility solution. The survival of many companies and the GDP of several European countries are at stake. The competitive picture in the wireless industry will be completely different when 3G CDMA based technologies become prominent. The industry incumbents are simply using all strategies (money, power, FUD/FUDD) to delay the ultimate outcome. 5. Some members of Qualcomm’s value chain were former adversaries/ competitors (MOT, Ericy), and some still are (NOK). The CDMA value chain is also composed of companies that also support GSM and as such help to weaken its structure as a united lobbying force. Qualcomm and perhaps Samsung are the only companies in the CDMA value chair that are on sound financial footing. Qualcomm being the primary developer of CDMA, controlling the architectural platform of CDMA2000, and receiving recurring royalties on all CDMA products is a target of even its customers who seek better terms to compete with their competitors. 5. What is/ can Qualcomm do to (a), offset this balance of power that has from its inception apparently kept CDMA and Qualcomm so misunderstood and under appreciated by the investing public, and (b) improve the lot of its faithful long term shareholders? A. Qualcomm continues to provide the “analyst” community and individual investors with many presentations describing in detail their business strategy and significant achievements. B. Qualcomm continues to advance CDMA and stay ahead of the competition thru large R& D expenditures (15% of 2002 revenue) and continues to increase its engineering staff. Further, Qualcomm must be treating in employees well as Qualcomm continues to be recognized as one of the top 20 company’s to work for in the country by its employees. C. The GDG’s / Qualcomm’s attempt to promote CDMA or anyone’s effort in that regard generally results in a barrage of articles countering the initial effort. I believe Qualcomm and the CDG are resigned to the fact that they cannot compete in the PR arena. D. I believe Qualcomm is confident that it and CDMA will eventually prevail and be recognized as the premiere company in an industry, wireless technology (CDMA), that will change the world. Qualcomm believes that its stock in currently undervalued and has instituted a $1 billion share buy-back program in recognition of that fact. Further, Qualcomm recently instituted a dividend and DRIP program for its investors. E. Perhaps in being ‘king of the hill”, these conditions come with the territory and must be accepted. JMHO- Other’s thoughts appreciated- jim