"The deal shocked the entire technology industry," Jim said. "Many skeptics do not understand how the technology industry has grown to such a large scale, which means that many technology companies value each other far beyond our common understanding."
Jim explained that Broadcom proposed the heavyweight of the acquisition of Qualcomm, in large part because of a rivalry between them, which is rare in a typical tech acquisition.
However, as Broadcom, Apple's largest supplier of components, may not be able to see the deal, Jim continues.
"The odds of the deal getting really done seem very slim," Jim commented. Subject to a patent dispute between Qualcomm and Apple, Qualcomm's share price has stalled. Qualcomm's board of directors knows that the companystockThe value is higher than its current stock price, they will not consider the company so to give the hands. "
But Jim said if Qualcomm shareholders are likely to be more willing to accept Broadcom's acquisitions, if Apple wins in this protracted litigation battle, no matter what the purchase price from Broadcom is.
"A simpler way to think about it, as is happening in many other industries, is that many semiconductor companies are bewildering the slightest bit of business, but if you can bring these companies together, you You can save a lot of money and improve your bargaining power with your customers, and you win, "commented Jim.
Jim added that many of the analysts and market observers who looked down on the deal often make only a prospective earnings analysis, and they conclude that they are not analyzed from the value of the acquisition. In Jim's opinion, analyzing the acquisition value of the deal allows us to better analyze the strategic value of the deal.
"This acquisition shows us the truth that these chipmakers are worth far more than their share price," Jim said. Analysts have revenue models, Broadcom CEO Chen Fuyang also has his own analysis model, and this is why Chen Fuyang want to acquire Qualcomm.
In the view of Jim, the technology industry, especially the semiconductor industry, has grown into an industry that is not just about smartphones and PC chips.
With the rise of industrial automation and machine learning technologies, these emerging industry companies have become much more aware of the demand for semiconductors than many Wall Street people, Jim added.
"Many skeptics want to judge some of the stock based on their PE multiples model, but if you look at a company as your acquisition target, as some CEOs and entrepreneurs do, Then you find that the market value of the company far exceeds the value you analyze from a bunch of spreadsheets, "Jim commented finally.
"Do not misunderstand what I mean, and some price-earnings models do tell you something about stocks, but in the real world we have more than just one way of evaluating a company."