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Mark wrote:

That was beautiful!!!! Nice use of opera and investing savy in a very informative post. Found a link to this post on the INTC board. Think every Foolish investor should read it. Hats off!

I chose Intel because it has been a public company trading for 28 years and is in the semiconductor business like Qualcomm is. I neglected to mention that the IPO original 100 shares are worth $7,719,046.88 today minus the original commission charge to the broker for those 100 shares.

I could easily have run the numbers for Qualcomm since it became a public company 8 1/2 years ago on December 16, 1991. An original purchase of 100 shares (which cost $16.75 each for a total of $1,675) has no grown into:

2 for 1 split on 2/24/94 = 200 shares
2 for 1 split on 5/11/99 = 400 shares
4 for 1 split on 12/31/99 = 1600 shares

At Friday's close, the original 100 shares ($1675) was worth $126,500. How does that compare to the first 8 1/2 years for an Intel investor holding 100 shares ($2350)? Intel went public on October 13, 1971 at $23.50 per share.

The original 100 shares in the first 8 years grew into:

Split Date type Accumulated shares

1. 05/17/73 3/2 150 shares
2. 05/15/74 3/2 225 shares
3. 05/26/76 3/2 337.5 shares
4. 09/01/78 5/4 421.875 shares
5. 05/31/79 3/2 632.8125 shares

Closing price on April 14, 1980 (8 1/2 years to compare with Qualcomm's first 8 1/2 years) was .61458 split adjusted from $59. This means an Intel investor holding 100 shares of Intel which cost $2350 at the IPO had grown to a value of $37,335.94 after 8 1/2 years.

I imagine we would want to inflation adjust the dollar amount of Intel holdings of $37,336 for the time period between 1980 and the year 2000 to see if Qualcomm IPO shareholders who bought 100 shares which stands at $126,500 today is more, less or similar. Regardless, they both are prime examples of the power of compounding for semiconductor companies that are the dominant players in their respective technology adoption life cycles.


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