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

To: bdog who wrote (8549)	2/15/1998 11:54:00 PM
From: Gregg Powers	Read Replies (4) \| Respond to of 152472

bdog: QC does NOT have any kind of change-of-control provision built into its license agreements. As a long-time institutional shareholder, I would take extreme umbrage with such an entrenchment device and such would have reflected quite poorly on management's character. Steve Altman, QC's (very bright) general counsel has assured me that no "poison put" arrangements exist anywhere within the company's corporate governance. So relax, QC's IPR is safe. The "good faith" comment is not meant to be tricky. A poison pill simply prevents a creeping tender where the would-be acquirer simply buys enough stock to seize control of the Board. In QC's case, the pill prevents any shareholder (or group) from acquiring more than 20% of the company without Board consent. On the other hand, we should never forget that the Board (ostensibly) works for shareholders, not for Irwin, Harvey and Andy (although management does hold roughly 15% of the outstanding shares). If an acquirer made a bona-fide offer, the Board would have a fiduciary obligation to evaluate the adequacy of said offer and either reject it for cause or accept it as fair. In the latter case, the Board would cancel the pill and allow the acquirer to move forward with a friendly transaction. Although I very much appreciate the compliment implied by your request for information about my firm, we are currently not accepting additional clients (although I would be happy to have my client relations manager send you information). Finally, to Stewart. I think Modoff's chip revenue estimate is a little high, and I also think your $30mm for Q2 net income is a little aggressive (although $2.00 for the year is not unreasonable). Also, remember that QC operates off a September fiscal year, so it is not unreasonable to begin discounting FY99 numbers--this is what I really meant when I said that Korea was "last year's" issue. In a quarter or two, the Street will begin looking past FY98. When it does, it will see something between 25mm and 35mm new CDMA subscribers (that translates into a lot of chips and ASICs), an infrastructure business inflecting to profitability and the commercial launch of Globalstar. The combination could have a profound implication for FY99 EPS. With respect to Korea, remember that (1) the won devaluation ONLY impacts royalties from handset sales within the country (Modoff seems to have underanalyzed this point) and (2) the Koreans are shifting output rapidly towards export, which as I keep repeating, could substantially mitigate the won/royalty issue on a go forward basis. Simply put, people need to track WHERE the handsets are GOING in order to evaluate how much risk there is to QC's profit stream deriving from Korea. It's a simple concept, but one that the Street really cannot seem to grasp. Best regards, Gregg