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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: Maurice Winn who wrote (62751)	4/18/2007 6:50:34 AM
From: rkral	Respond to of 197036

"Personally, I wish they would NOT buy QCOM shares at these levels. I would like them to pay it out as dividends and anyone wanting to buy QCOM shares at these levels can do so." Many years passed while I flip-flopped on the stock buyback vs dividend issue, and I've only recently settled on a POV that I'll likely stick with. Stockholders' equity statements generally show both CS&APIC (common stock & additional paid-in-capital) and RE (retained earnings) accounts. Each years earnings are added into RE. Although recently changed by the FASB mandate to expense options, proceeds from stock option exercise and the tax benefit from option exercise are added into CS&APIC. So if a company has a stock buyback program, I prefer to see the amount taken only from the CS&APIC account. IOW the cash used for buybacks would be limited to cash provided by financing activities (initial offerings, secondary offerings, and option exercise). Distribution of retained earnings should be done via dividends. JMO

To: Maurice Winn who wrote (62751)	4/18/2007 1:36:21 PM
From: Art Bechhoefer	Read Replies (2) \| Respond to of 197036

Maurice, your suggestion that QCOM pay dividends in the form of shares is tantamount to QCOM buying up shares first, and then distributing them. I don't see much value in such an exercise. Better to buy the shares and retire them, reducing the total number of outstanding shares and increasing earnings per share on the remaining shares. The company might also consider a dividend reinvestment plan, whereby shareholders can direct some or all of their dividends be delivered in the form of additional shares. This would, in effect, entail periodic purchases of QCOM shares by the company in order to have shares available for dividend reinvestment. For those who expect to buy more shares, dividend reinvestment eliminates the cost of commissions on conventional purchases through a broker. The disadvantage is that the shares are purchased at a time set by the company, and not by the shareholder. Art