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

To: Caxton Rhodes who wrote (29998)	5/13/1999 5:20:00 PM
From: llwk7051@aol.com	Read Replies (4) \| Respond to of 152472

Caxton, While this is not my area of expertise, generally companies don't make adjustments recognizing gains unless the stock is being held for resale. Thus, I doubt Qcom will make any adjustments to its books for Nextwave. If I am wrong and qcom did, it is my opinion the street will ignore it since it will be a one time charge. I don't see any short term impact on earnings to Qualcomm from this. It is my opinion the reason they did this venture was to get cdma off the ground when no one believed in it. Also, it may have been a part of the spinoff to lwin. Robert D.

To: Caxton Rhodes who wrote (29998)	5/14/1999 3:21:00 PM
From: RalphCramden	Read Replies (2) \| Respond to of 152472

The decision of the court makes surprisingly good reading! It is available on the web at ecf.nysb.uscourts.gov It includes a very readable and very coherent history of cellular telephones up through and including the PCS auctions, with summaries about how the price per POP-MHz has varied over time and possibly why. It is my understanding that the Fair Market Value of the licenses was determined to be $906 million vs. the $4.7 billion originally assessed Actually the bottom line was slightly higher than that, the courts ruled the fair market value of NextWaves licenses to be $1,023,211,000 on the 19 Feb 97 on which the court ruled the transaction was completed. This is $3,720,437,000 more than Nextwave "paid" Apparently under bankruptcy law, your creditor can't enforce a promissory note which it got by giving you a whole lot less value than the value of that promissory note. This winds up helping NextTel here because the court is essentially ruling that the licenses nextwave bought had a FMV of $4.7b as of the auction date, but had dropped to only $1b by the time the FCC accepted Nextwave's long-form application and completed the transaction. As I understood it, if this had been a straightforward auction where the licenses were delivered to NextWave in exchange for promissory notes on the day the auction completed, the FCC would be able to attempt collection of its full value of promissory notes. So the court ruled that the FCC can give up on $3,720,437,000 of the promissory notes which NextTel gave it, at least for the purposes of trying to get paid for those by the bankruptcy trustee. I don't know enough about bankruptcy law, or enough about how bankrupt NextTel is to know this: does this mean NextTel's stock might be worth something? What an interesting theoretical issue! Suppose NexTel had $3b of assets (including the licenses) but it had $5b of obligations (including the IOU's to FCC). Then NextTel is insolvent (net<$0) and thus eligible for reorganization under bankruptcy law. But the court rules that $3.7b of the obligations are unenforcable under bankruptcy law. Suppose the rest of the obligations are enforcable. You now have a reorganization where only $1.3b of obligations have to be satisfied with $3b of assets! So the reorganized company is net worth $1.7b! Is this a reasonable or legal outcome, that you come out of bankruptcy worth $1.7b having gotten rid of IOU's you could not have gotten rid of without going bankrupt? If anyone knows more about law/bankruptcy/nextwave than I I would be interested in knowing the answers. Ciao, Mikey