Hearing Eric's question, Owen Jacob didn't know how to answer for a while.
Although Qualcomm has not hesitated to authorize CDMA technology externally, so far, there is not even a large-scale CDMA equipment manufacturer in the world. With GSM equipment manufacturers blooming all over the world, even Nokia, which has a solid accumulation of production technology, was almost collapsed by the rapidly expanding market demand, let alone Qualcomm, which is almost poor in terms of equipment production capacity. .
In fact, Qualcomm has its own communication equipment and mobile phone factories, but most of the equipment produced by that factory is only used to meet the testing needs of CDMA technology. There is no complete component supply chain, and a small amount of components are often purchased according to demand. This situation cannot support large-scale CDMA equipment production at all. It is conceivable that if the situation continues, even if those large telecom operators intend to choose CDMA as their mobile communication technology standard, they will definitely turn to GSM technology again if they cannot get enough CDMA communication equipment to build a mobile communication network camp.
Seeing that Owen Jacobs was silent, Alan Sarmasi, who was sitting next to him, eagerly explained: "Eric, the difficulty in manufacturing communication equipment is mainly the design and development of core chips. In this regard, Qualcomm Already owning very mature products, as long as CDMA technology can be promoted, Qualcomm can not only quickly build factories for equipment production in a short period of time, but also entrust communication equipment manufacturers to carry out product OEM.”
Eric nodded with a smile and did not raise any objections. The main reason he said what he said just now was to elicit what Alan Salmasi said at this time.
It is true that technology research and development burns money, but in fact, the construction and operation of the equipment manufacturing plant is more costly. The 420 million US dollars that Nokia obtained from Firefly and the profits in the past two years have basically been invested in its factories. In the process of expansion. After more than ten years, Qualcomm's main business is not the production of communication equipment and mobile phones, but mainly focuses on patent licensing and chip research and development. Eric knows all of these, but at this time he led Qualcomm to this road. But it is not in the interests of Firefly, because if Qualcomm is not involved in the field of product manufacturing. There is no need for large-scale equity and debt financing, and it will be difficult for Firefly to acquire a large number of Qualcomm shares by virtue of its capital advantage.
Through the communication at the dinner table, both parties roughly determined their respective intentions.
After lunch, Eric, Chris, and Kelly came to the study with Owen Jacob and Alan Salmasi. Both parties have also officially opened up.
Eric handed a shareholding document to Owen Jacobs and Alan Sarmasi, saying: "I have noticed Qualcomm since last year, and I am very optimistic about CDMA technology. During this time, Firefly has already We have successively absorbed 2.1 million Qualcomm shares, and we will report to the SEC and Qualcomm’s board of directors in the near future. In order to show the sincerity of Firefly’s cooperation, I will first inform the two of you about this.”
Owen Jacob and Alan Sarmasi just opened the document symbolically and looked at each other, and then looked at each other, and they could almost see the disappointment in each other's eyes at the same time.
Qualcomm has long realized from the recent abnormal fluctuations in the company's stock price that someone is buying Qualcomm stock in large sums. The board of directors and management originally thought that someone had obtained inside information that CDMA technology was about to be determined as a technical standard by large telecom operators. ', so I took the opportunity to enter the market and wanted to make a lot of money after the relevant facts were made public. Qualcomm only issued 30% of the outstanding shares at the beginning, so the board of directors was not worried about losing control of the company. Instead, it was quite excited by this speculation and made some related preparations for it.
Unexpectedly, the answer to the mystery is suddenly revealed now. The fact has nothing to do with the original speculation. CDMA has not been "defaulted" by any telecom operator. The disappointment of the two can be imagined.
However, after a short period of disappointment, Owen Jacob and Alan Sarmasi remembered Eric's identity again, and their mood improved. At least, it is not a stock speculator who secretly bought Qualcomm stock, but a billionaire like Eric who is really interested in Qualcomm. As long as he can spare no effort to use his own capital and influence to help promote CDMA technology, Qualcomm It is very possible to get out of the current predicament.
certainly. Although he has been focusing on technology research and development, Owen Jacobs will never naively think that the 2.1 million shares that Firefly already holds can satisfy Firefly’s appetite. This stake only accounts for 10.5% of Qualcomm’s total share capital, he said. : "Eric. Since Firefly has done so much preparation work, I think you must have a detailed plan, right?"
Eric nodded and said: "So far, no large telecom operator is willing to adopt CDMA technology as the technical standard for its mobile communication network. Its network resources, media channels and capital advantages help Qualcomm promote CDMA technology. However, at the same time, Qualcomm also needs to immediately solve the problem that it cannot mass-produce CDMA equipment. I don’t want to see Firefly spend a lot of effort Let operators accept CDMA technology, but because CDMA equipment cannot be supplied in time, they are transferred to the GSM camp again. Therefore, I suggest that Qualcomm start to build communication equipment and mobile phone factories immediately.”
Compared with Irving Jacob, who was concentrating on technology research and development, Alan Sarmasi focused more on the actual management of Qualcomm. Hearing the first half of Eric's words, he was a little excited just now, because Rick became distressed in the second half of the sentence, and interjected: "Eric, it's not that we haven't considered this aspect, and we have done detailed research. According to the original research results, we only built a CDMA mobile phone with an annual output of 1 million units." The total investment of the factory is 80 million US dollars, we can't do it at all, uh... "
Having said that, Alan Sarmasi noticed that Eric was looking at him with a smile, and suddenly realized something, stopped talking, and smiled awkwardly.
Eric didn't mind Alan Salmasi interrupting himself, and continued with a constant smile: "I know that Qualcomm will definitely not be able to finance the construction of equipment factories, but the money can be paid by Firefly. Frankly In other words, Firefly helps Qualcomm promote CDMA technology, and hopes to get enough returns. Therefore, I hope to increase the shareholding ratio of Firefly in Qualcomm through capital injection.”
Owen Jacobs had realized this just now, and asked, "Eric, how much money does Firefly plan to inject into Qualcomm?"
Eric said in a relaxed tone: "According to what Allen just said, a mobile phone factory needs an investment of 80 million US dollars, and Qualcomm must also build a CDMA base station equipment factory at the same time. This investment can also be counted as 80 million, which is 160 million The investment in two factories is definitely not enough. Qualcomm also needs to establish a component procurement and product marketing system. Then, this expenditure can be counted as 200 million US dollars. According to the current stock price, Qualcomm probably needs to issue additional shares to Firefly 10 million shares."
Irwin Jacobs calculated in his mind that by issuing 10 million additional shares, Qualcomm's total share capital will expand to 30 million shares, and the 2.1 million shares already held by Firefly will increase its shareholding in Qualcomm to 40% by then. . Although it has not achieved a controlling stake, Firefly will also become the largest shareholder that is of great importance to Qualcomm.
In order to establish Qualcomm, Irving Jacobs invested almost all of his net worth, but after several rounds of financing over the years and the IPO in 1992, Irving Jacobs’ Qualcomm stock is less than 1%. As long as Qualcomm can continue to To survive, Owen Jacobs didn't care much about the company's equity changes. He also knew that Firefly would not get enough equity, so he would definitely not do his best to help Qualcomm promote CDMA technology, so he thought about it for a while. He nodded and said, "Eric, I have no objection to your proposal, but when it comes to additional stock issuance, this matter will be decided by Qualcomm's board of directors."
AT-T's announcement to join the GSM camp has caused Qualcomm to lose more than half of its potential North American market. If companies such as Verizon and Sprint also choose GSM in the future, Qualcomm will have to go through bankruptcy and liquidation. At this time, Firefly bet a huge sum of US$200 million on Qualcomm. If it fails, the US$200 million will be equivalent to water drift. Eric believes that Qualcomm's board of directors should understand that Firefly does this. It is equivalent to showing that the entire Firefly system will spare no effort to promote Qualcomm's CDMA technology. Although the final capital injection plan will be adjusted, the possibility of Qualcomm's board of directors rejecting Firefly's capital injection is very low.
Looking at his watch, Eric said: "So, Owen, Chris and Kelly will be responsible for the next specific affairs. I hope to hear good news from Qualcomm as soon as possible."
Just as Owen Jacob was about to say something, he felt his shoe kicked lightly by Alan Salmasi, and suddenly remembered the plan discussed by the two of them yesterday, and said: "Eric, Alan and I There is another plan here, I hope you can take a look."
Eric nodded, took the document that Owen Jacob took out from his briefcase, read it carefully, and passed it to Chris and Kelly next to him in turn.
Owen Jacob and Alan Sarmasi watched the three people facing each other with some trepidation, worried that Eric would directly reject the proposal.
After waiting for a while, both Chris and Kelly read the information, and then just looked at Eric, without making any suggestions. A huge plan involving 4 billion US dollars, after all, Eric still needs to make his own decisions.
Eric thought about it for a while, and said, "I think this plan is a bit idealistic."
When Owen Jacob and Alan Salmasi heard Eric's words, their heartstrings were loosened. At least, Eric did not reject the plan on the spot.
Eric didn't know what the two were thinking, and continued: "You must know about the lawsuit about the C-section license plate. The reason for the lawsuit is very absurd, but it can still delay the auction of the C-section license plate for a long time. It can be seen that the old telecom operators will not allow those small and medium-sized telecom companies to develop. Even if we buy all the C-segment licenses, the final lease users should still be several telecom giants such as AT-T, and perhaps in the C-segment license auction These mainstream telecom operators have already determined the technical standards before, so this plan has little significance for the promotion of CDMA."
Owen Jacob and Alan Sarmasi realized that Eric hadn't spoken to death, and waited patiently for the following.
Eric didn't hold back, and said: "However, this plan can be used as our last move. If the mainstream telecom operators do not choose CDMA technology in the future, Firefly can start this plan and win all the C-segment licenses. Then acquire a telecom operator and build a CDMA communication network by yourself." Having said that, Eric looked up at the two of them, smiled and said: "Of course, the premise of all this. It is our cooperation that can be successfully concluded, otherwise Firefly is Money will not be wasted on CDMA technology."
Arun Sarmasi suppressed his mood and asked: "Eric, you mean, as long as Qualcomm accepts Firefly's capital injection. Will you agree to implement this plan?"
Eric shook his head and said with a smile: "I just said that this will be the best move for Firefly. If it becomes the majority shareholder of Qualcomm, Firefly will first choose to promote CDMA technology to established telecom operators such as Verizon. Firefly will launch this plan only when these mainstream operators do not accept CDMA."
Hearing Eric's words, Owen Jacob was far more excited than Alan Sarmasi. CDMA is his brainchild of ten years. In any case, Owen Jacob hopes that CDMA can continue. Rather than being silently squeezed to death by GSM and other technologies: "Eric, can I understand that as long as Firefly becomes a major shareholder of Qualcomm, you will never give up CDMA technology?"
Eric nodded without hesitation. Even if GSM really dominates the world, there will still be a day when the technology will be upgraded. 3G communication technologies such as WCDMA and TD-CDMA in the previous life cannot bypass the CDMA standard after all, so even if CDMA has temporarily lost in this industrial upgrade, and it is also profitable to win Qualcomm, which has a large number of CDMA patents.
Owen Jacob was still a little worried. Said: "Eric, I mean, can Qualcomm get Firefly's written endorsement of this promise?"
"Okay," Eric nodded again.
"Then." Owen Jacob stood up, stretched out his hand to Eric who also stood up, and said, "I will give you good news as soon as possible."
…
It was already evening when Owen Jacob and Irving Jacob were sent off.
Eric and the others went back to the villa and sat down beside the glass curtain wall, looking at the magnificent sunset sea view outside the curtain wall, Chris asked: "Eric, are you really going to buy all the C-section licenses for $4 billion? "
Eric took the freshly filled coffee from Kelly and said with a smile: "I said it before, this is the last resort plan. Instead of buying the C-section license, I would rather use the 4 billion US dollars to invest in the stock market." Either Verizon or Sprint."
Hearing Eric bring up the topic they were talking about before the arrival of Owen Jacobs in the morning, Chris said: "About this matter, I am afraid it is not easy. Compared with high-cost equity financing, the old telecom operators They prefer debt financing. However, the capital needs of both companies are very large at the moment, so your idea is not out of the question, and if you decide to do it, I will start working on it as soon as possible.”
Eric nodded decisively and said, "Let's talk to them according to the capital injection amount of 4 billion US dollars. As long as I can get the shares of the two companies, I don't mind suffering some losses on the price."
Chris smiled and said: "4 billion is too difficult, they are willing to accept the injection of 2 billion from Firefly."
$4 billion is equivalent to 40% of Sprint's equity. Even Verizon, which is twice the size of Sprint, can get 20% of Verizon's equity for $4 billion. Eric is also aware of the difficulty, saying: "Do your best. Just do it."
While chatting, Drew and Emily walked in with big bags and small bags, and the twins behind them also carried a bunch of things in their hands. It was obvious that the two girls should go shopping in the afternoon.
Hurling over, Emily looked at her boyfriend's surprised expression, put down the convenience bag in her hand, and explained: "These are all Drew's things, but I only bought a few, and they are all in the car. where."
Xiao Nizi smiled and immediately disassembled the stage, saying: "Yes, yes, it's just a few pieces, maybe it's a bit big, and it fills up the trunk and the back seat."
After teasing each other a few words, Chris took Emily and planned to get up and leave.
Eric didn't hold them back, and sent them out of the villa. When the two got into the car, he asked, "When are you going back to New York?"
Chris didn't answer, just looked at Emily.
Emily explained: "Victoria's Secret has been shooting commercials in Los Angeles recently. In addition, Cindy will also attend the Golden Globe Awards ceremony. We will probably wait for the Golden Globes before leaving."
Eric said: "Why did the Golden Globes only invite Cindy Crawford?"
"The Golden Globes originally hoped that the five of them would present the best soundtrack award together, but we also received an invitation from the Oscar committee, hoping that the five of them would be on stage together. Between the Golden Globes and the Oscars, of course we will choose the latter The winner. Then the Golden Globes took the next best thing, and only Cindy was invited."
Emily said, got into the car, then poked her head out again, and said, "By the way, Eric, if you are free these two days, help me to see the effect of the Victoria's Secret commercial, we will be in Firefly Studios will do post-processing."
"No problem, I'll probably be there for a few days, you can contact me anytime."
After sending Chris and the two away, Kelly also took the initiative to say goodbye and left, returning to the villa, Xiao Nizi got into the room to check the results of today's shopping, Eric sat on the sofa by the curtain wall, and carefully sorted out the results in his mind. With everything today.
The sun sank completely into the sea level, and the light gradually dimmed.
After an unknown amount of time, Eric felt a tall and slender figure approaching quietly. Eric looked up, looked at Natasha's beautiful white face, and signaled her to turn on the nearby lights.
Natasha quietly walked to the wall and turned on the light, and said softly, "Master, dinner is ready."
Eric nodded, just got up, remembered something, and asked, "Where is the package that Chris brought me this morning?"
Natasha said, "It's in the bookcase in the living room."
"Send it to the study after dinner."
"Hmm." (To be continued.)