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Broadcom Launches $103 Billion Bid for Qualcomm

11/6/2017 08:01 AM EST
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resistion
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Antitrust
resistion   11/4/2017 4:06:47 AM
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Obvious antitrust - B and Q were embroiled in suits already.

DMac
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Re: Antitrust
DMac   11/4/2017 2:35:00 PM
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I'm with you. I don't see how this could possibly fly. But it's astounding to see the boldness of the thinking. Consolidation in this industry apparently knows no bounds... 

photonic
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Boldness of the thinking .. ?
photonic   11/6/2017 10:57:33 PM
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The thinking was invented in the 1980's and is called a "Leveraged Buyout" (LBO) or colloquially a "Corporate Raid". This thinking needs to be bold because it allows a finance company to make a profit by buying and then selling a company whose product it knows nothing about. It goes like this. You find a company that is making a return on investment that is less than would be possible if the company were run solely to maximize short term profits. You sell those parts of the company that do not add to profit. You offer the current owners a price they cannot refuse. In the 1980's Michael Milken created the market for high yield junk bonds and spurred the LBO boom. Today Private Equity companies have learned how to finance an LBO without using junk bonds. They buy Semi companies at favorable prices from poorly run and bloated companies (HP and Motorola) and quickly take them public in an IPO under a new company name (Avago and Freescale). They continue to borrow using the company as collateral.  Broadcom is not a semi company. It's a finance company.    

rick merritt
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Re: Boldness of the thinking .. ?
rick merritt   11/7/2017 8:48:05 PM
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Hock Tan has become a master of the post-LBO with his slice and dice of LSI and Beroadcom and, if he gets a regulatory OK, Brocade. Qualcomm would take that game to a whole new level.

photonic
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Re: Boldness of the thinking .. ?
photonic   11/8/2017 3:42:15 AM
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Hock Tan is a PhD in LBO. His thesis advisor was Henry Kravis of KKR, one of the two Private Equity companies behind Avago. KKR invented the LBO.

Jimelectr
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Re: Boldness of the thinking .. ?
Jimelectr   11/9/2017 1:32:32 AM
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That's about it.  Bottom line is all that matters.  Darn shame, but that's the thinking.  Somewhere between this Asian-style hypercapitalism and Eurosocialism used to be American true capitalism.  Not anymore.  Sigh...

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