Qualcomm Tells Broadcom to Forget It

DooKey

DooKey

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Qualcomm's board has unanimously rejected Broadcom's $103bn buyout proposal, slamming its rival's bid as having "dramatically undervalued" the multi-billion-dollar chipmaker. I'd say Qualcomm wasn't the least bit interested in the buyout and it seems they were kind of angry about it. Anyway, I wonder if this is ever going to happen?

"After a comprehensive review, conducted in consultation with our financial and legal advisors, the Board has concluded that Broadcom’s proposal dramatically undervalues Qualcomm and comes with significant regulatory uncertainty," said Qualcomm president Tom Horton.
 
The $$$ is all over the universe, depending on what site you read. I have seen $105 MILLION, $103 billion, $105 billion and $130 billion.
 
Anyone read their response as “Whaaaaaaa! Wanna keep our posch board jobs sniffing”
 
Considering Qualcomm chips or some of their technology is in every single phone on the planet, I'd say they were greatly undervalued.
 
When I read $105 billion I thought holy crap that's a lot of money, and then looked at it as someone was trying to buy the leader in mobile chip market I laughed.
It might have been something if they were the ones doing the purchasing.
 
I thought the bid was something like 20-25% over the current stock price. How is that undervaluing the company?
 
Qualcomm's market cap is $98bn. I'd say that $105bn is a little low when you factor in that if you went hostile and tried to acquire significant stock through the market, you'd end up driving the cost up significantly. *Edit* some reports indicate it was $130bil.

Qualcomm unanimous rejection is essentially them saying they're undervalued in the market (e.g. their market price doesn't reflect the actual value of the company) - that the current share price of $66 is a bargain.

Remember, market cap does not equal company value. It's just a simple indicator for size. A real valuation takes in each component (debt, assets, market position, future outlook, etc.) as they maybe overlooked by the share price.
 
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I imagine Qualcomm's value will drop a little when Apple moves away from them. It's only 7% of there business, but that's still a nice chunk.
 
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