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I had read a few weeks back that QCOM had a significant number of options and convertible securities outstanding, which if exercised in full, could cause some serious dilution. Can somebody post the exact numbers?

I am seriously evaluating QCOM for my next purchase (I already own Cisco, TXN and Nokia). It came up on my radar screen as a potential LTBH thanks to the very knowledgable posters on this board. Please keep up the good work.
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1000nam,

I havent seen anything specific but this sounds like a version of the Bill Parrish vs MSFT and the high tech stock world thing. Also rehashed about one month ago in "The Economist" and other European media. The basic premise is that high tech stocks are all losing money because they use options to pay employees as part of their compensation, as well as for acquisitions etc. The hypothesis is that if cashed all at once the companies would lose money covering and fail and the market would crash and someone would call all your ex girl/boy friends and tell them your new address, etc etc.. It has been largely, if not entirely, debunked by most folks knowledgeable in this area - including an article a while back in the RM port (sorry no link but it should be in the archives on a topic about "options overhang").

Anyway, if there is serious information on this topic I would be happy to know, as well as a source with hard numbers. Til then I too am considering QCOM, though the ROIC is holding me back a bit (about 50% for annual98 and 4*prev qtr than for Nokia), anyone got good reasons/data for that???

cheers,

jgc
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I had read a few weeks back that QCOM had a significant number of options and convertible securities outstanding, which if exercised in full, could cause some serious dilution. Can somebody post the exact numbers?

Mycroft and I discussed this on the Ahlgren board a few weeks ago. Mycroft raised the issue of the dilution in this post:

http://boards.fool.com/Message.asp?id=1380065000251000&sort=postdate

and I responded in this post:

http://boards.fool.com/Message.asp?id=1380065000251003

Counting new shares from the secondary and the convertible shares is fairly clear cut. Counting options isn't. The number of options included in the fully diluted shares number is highly dependant on the stock price and the option strike price. In general, the higher the stock price goes, the greater the number of shares which will be included in fully diluted shares. The 10-q's and 10-k's filed by the company give a complete breakdown of outstanding options. This is a good site for looking up the filings, for those who are interested:

http://www.freeedgar.com/

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