Reinventing the Millennium

China vetoed the first technology acquisition in history on the grounds of suspected monopoly and obstruction of market competition.

The marriage between Qualcomm and Broadcom has officially fallen through.

This news came too suddenly, and it directly set off a turmoil in the secondary market. Qualcomm, which had just stood at 80 billion US dollars, plummeted 12.7% in a single day, evaporating 10.16 billion US dollars, and its market value was severely hit, directly starting with a six. This saves us from the $10 billion detour of struggle.

No one expected that China would step forward at this time...

Yes... A transaction of this level between Qualcomm and Broadcom requires approval. Because of the global business distribution of the two companies, this time they need to apply for licenses from nine countries or regions including the United States, Europe, China, Russia, Japan, and South Korea.

However, China's response was too fast!

So simple!

It’s hard not to think of this, and a reporter in China immediately asked a question about it, and got an answer that sounded very reasonable—it was actually included in the reasons for disapproval.

"According to the investigation, Qualcomm's product sales and patent licensing have monopolistic behavior. Although these confirmed situations have not been finalized according to the process, they are undoubtedly true."

"Based on this situation, Qualcomm has neither made rectifications nor attempted to acquire Broadcom to once again strengthen its market dominance, which undoubtedly hinders reasonable and orderly market competition."

You see, it’s Qualcomm’s monopoly, it’s Qualcomm’s failure to rectify things, it’s Qualcomm’s fault that it wants to do a second thing before one thing is settled, it’s all Qualcomm’s problem, it’s all Qualcomm’s too much haste!

But, no matter what, it’s no.

Because of such a rejection, Meilijian, which is still studying whether the two companies are compliant, also raised objections, but the decision will obviously not change.

The antitrust knife hanging over Qualcomm's head has not yet fallen, and it just killed a planned acquisition first.

how so……

This time Qualcomm acquires Broadcom, there are many investors and investment institutions who are looking forward to the news. They have also seen the hope of continuous growth. Compared with two months ago, Qualcomm already has a market value of 80 billion, but in just one day, it has directly It’s less than the gains in the past two months!

A similar situation exists for Broadcom, whose stock price also fell 7.1%, but after all, it has one less negative antitrust problem than Qualcomm, which can barely make people wipe their tears.

However, this time it was rejected and this transaction fell through, Broadcom was very dissatisfied. CEO Blanch, who advocated this decision, naturally took responsibility and became the second CEO to step down in the recent merger and acquisition crisis.

The rapid resignation of two CEOs in succession aggravated investors' concerns the next day. Broadcom's stock price still fell 6.7% the next day, and US$3.7 billion disappeared in two days.

However, compared to Qualcomm's continued double-digit decline the next day, Broadcom pales in comparison.

On Qualcomm's second trading day, in addition to China's rejection of the acquisition, another bad news also emerged. Apple's new tablet this year added an independent baseband chip from Yike WLS to the official website. According to the test of bloggers who got the product for the first time , the level is almost the same as that of Yike’s flagship Mars Zhurong chip.

Previously, Yike WLS has provided chips to the outside world, but it was mainly purchased by the "Kesheng" mobile phone controlled by Yike. The product effect is not as good as the integrated Zhurong chip, let alone Qualcomm's chip.

At that time, some people believed that there was still technology inside WLS that had not yet appeared. Now, this conjecture has been confirmed. Apple's iPad has been equipped with a WLS baseband chip. According to custom, it will most likely continue to use WLS on the iPhone in the fall after breaking with Qualcomm. product.

There is still a 10-20% performance gap between WLS and Qualcomm.

However, both Apple and Yike are obviously determined to engage in technology research and development despite the gap, which means that Qualcomm's performance lead may not be maintained for long.

With such a pessimistic forecast and China's veto, Qualcomm's decline reached 11.2% on the second trading day, and its market value plummeted to 62.018 billion U.S. dollars, and it seemed to be heading below 600.

In two days, $18 billion in market value suddenly evaporated, leaving Qualcomm investors devastated.

The Wall Street Journal has been paying close attention to the patent litigation and mergers and acquisitions surrounding Qualcomm. Looking at the shocking and shocking plunge in the past two days, it gave it the title "Qualcomm Disaster."

Qualcomm tragedy!

"Is Qualcomm not even worth 60 billion US dollars?" Jacobs, the head of Qualcomm, who had remained silent for two consecutive days and refused to be interviewed by the media, couldn't sit still. He angrily spoke out on Twitter. The criticism left at this moment Investors who walked away from the market.

However, someone posted comments from Jacobs who had previously been interviewed on other occasions.

Three months ago, Jacobs responded disdainfully to a question: Is Qualcomm not even worth 70 billion?

——Jacob, how much is Qualcomm worth?

Questions from investors on Twitter were difficult for Jacobs to answer.

The most important thing is that such questions have also appeared within Qualcomm. Jacobs has received similar direct inquiries from more than one institutional shareholder. How much is Qualcomm worth now?

When Qualcomm faced challenges from Yike and Apple's antitrust alliance, its market value also dropped by US$70 billion, but soon stood above US$70 billion. Although institutional shareholders also had questions, they were relatively tactful in meetings and phone calls. I can also accept the explanation from the leader Jacob.

But...the market value of more than 18 billion US dollars disappeared in two days!

Looking at Qualcomm's current $62 billion, it is particularly easy to think of the acquisition offer from Avago at the end of June, which was $89.5 billion!

That’s $89.5 billion!

It was Anwar who made up the US$89.5 billion by asking his grandfather to sue his grandmother!

Now think about it, Anhua Gao has quoted the price three times in a row, which is very sincere. Even though Chen Fuyang is Chinese, he also did a good job with Anhua Gao!

895-620=275.

30.73%!

In less than half a month, it was discounted by 30%!

Aren’t institutional shareholders human beings?

Why should we feel the pain of retail investors?

In just two days, Jacob encountered unprecedented doubts internally. The biggest question was-why not consider China's veto?

Why not consider...

Because China really rarely does this.

But Jacob's explanation pales in the face of the interests that have been wiped out. Why don't you, a dignified and world-famous company leader, consider this?

No wonder Chen Fuyang accused you of being unable to lead Qualcomm forward in such an era of "radical change"!

Jacob was criticized and ridiculed, and he really learned what a "catastrophic change" was.

On Qualcomm's third trading day, after two days of panic, the decline narrowed, falling only 2.1% throughout the day. However, after the close, another piece of bad news was heard - Broadcom was considering restarting acquisition negotiations with Intel and Yike.

On the other side, Broadcom saw that Qualcomm was useless, and in a blink of an eye, it showed goodwill to its old friend.

If this happens, the problem will be back to square one.

Qualcomm is likely to face a severe challenge from the "New Broadcom".

What to do this time?

Jacob was in pain, but he had to face today's difficult situation. On the one hand, he requested to increase lobbying for CFIUS, the Committee on Foreign Investment, and asked it to also reject Yike's acquisition. On the other hand, he discussed the competitive situation facing Qualcomm. .

Compared with previous challenges, Apple's tablet equipped with WLS baseband chip is extremely important news. This is a signal to truly launch a product charge.

Moreover, considering Yike's home court advantage in China, the threat from WLS is really great.

Two days later, perhaps because the media was still buzzing about Broadcom's restarted acquisition negotiations, or perhaps because of some informal review, Yike announced its withdrawal from the acquisition of Broadcom.

As soon as this news came out, it was immediately regarded as "the US version of the acquisition rejection."

Qualcomm's acquisition was rejected once, and Yike's acquisition was also rejected once. We are evenly matched.

Without the presence of Yike, the related criticism immediately dropped. As for whether Intel can acquire Broadcom, this is much less news than "a Chinese company acquires a well-known American semiconductor company" and "Qualcomm's acquisition of Broadcom was vetoed by China." Pay attention.

Qualcomm's stock price has recovered slightly, but Jacobs knows that the threat from the giant has not disappeared much.

It is true that Yike will not participate in the acquisition of Broadcom, but once Intel acquires Broadcom, can the two giants carry out technical cooperation to promote the advancement of baseband chips?

Intel has always been eyeing the mobile terminal, while Yike wants to challenge Qualcomm's position.

The needs of these two giants do not change whether they are acquired or not.

The public momentum for acquisitions has faded, but the actual technical cooperation still has an edge.

This is something that still worries Jacob.

On Friday, Qualcomm's stock price remained volatile at the opening, and meetings were still held within the company, but this time there were also institutional shareholders participating.

Jacob chatted for a while about market analysis and China’s antitrust investigation.

When he stopped speaking, an institutional shareholder suddenly indicated that he had something to say.

As long as it's not a scolding, Jacob doesn't resent the voices of shareholders now.

"Qualcomm's reliance on a single business was revealed in this China antitrust investigation. In fact, if the company could really acquire Broadcom, it would indeed solve a big problem, but it was ultimately rejected. I don't think Jacobs can be blamed."

Baddeley, a representative from institutional shareholders, expressed his understanding of the CEO.

Then, he made a suggestion that made everyone's eyes bright: "Since acquisition can indeed solve our problems, although we cannot acquire Broadcom, why can't we initiate acquisitions of other companies? Can China still veto us again and again?" acquisition?"

Jacob pondered, this...

The external hostile takeover has ended, and Qualcomm does not need to consider this factor. If it continues to look for other targets, it will only have two purposes. One is to reverse the business structure, and the other is to respond to the possible "New Broadcom" offensive.

Although the acquisition of Broadcom failed, the past period of time has made Jacob realize the advantages of capital means, and the secondary market before the rejection also recognized the company's actions.

From Monday to Friday, Jacob had been immersed in the plummeting stock price. Now that he thought about it, it was not his fault, at most it was something that was not handled properly.

There was a buzz of discussion in the conference room.

What Jacob thought of was also thought of by the executives. No one wanted to see the company's stock price drop. They didn't want to see all kinds of accusations on the Internet and in the news. They should pay attention to the lessons of the past and learn from the successful experiences of the past.

Qualcomm’s acquisition of Broadcom can be considered half a success.

If there is another acquisition, China still needs to pay attention. The small probability thing has already happened once, and it is very likely to happen a second time. Behind this, Yike's fueling is indispensable.

Baddeley, the representative of institutional shareholders, listened to the discussion among the company's executives and heard everyone talking about China's veto. He spoke up again and made a suggestion: "Jacob, what do you think of Avago?"

Jacob was stunned, not expecting to hear Anwargao's name in this situation: "Huh?"

Baddeley nodded and confirmed: "Yes, how about Qualcomm acquiring Avago? Its market value is smaller than Broadcom, and it is easier to acquire. It also has similar businesses, involving wireless connections, optical fiber communications, and data centers. product, and it has an advantage that Broadcom cannot match.”

Jacob waits for the rest.

"Qualcomm's acquisition of Avago does not require China's approval!" Baddeley came prepared and stated, "Avago has been acquiring and selling businesses over the years. Its focus is not on the Chinese market. Last year, its business there was The amount received did not exceed 400 million Huaxia coins, which does not meet the declaration standards for concentration of business operators!"

As soon as these words came out, the atmosphere in the Qualcomm conference room warmed up.

In just one week, the power of administrative intervention was so impressive that Qualcomm internally hated it.

If you change the target to Avago, you can directly avoid declaration!

What's even better is that Avago also wanted to make a hostile takeover of Qualcomm before. It never imagined that it would be acquired by Qualcomm soon, right?

Jacob thought about the anti-acquisition of Avago, thought about Chen Fuyang's attack on him, and thought about his shady behavior on Twitter, and a smile appeared on his face unconsciously.

This directly solves a problem from a procedural perspective.

As for whether Avago is suitable for Qualcomm...

This still requires research.

The discussion in the conference room changed direction.

However, just as the afternoon was coming to an end, a piece of bad news struck again. The Ninth Court of Appeals issued a ruling and sent back the patent litigation part between Yike and Qualcomm for retrial, involving the "FRAND commitment" of Qualcomm's standard essential patents. "Identification.

This news interrupted the recovery of Qualcomm's stock price and once again made investors who were trying to buy the bottom miserable.

Buy the bottom, buy the bottom, where is the bottom?

After a week of trading, Qualcomm’s market value barely remained at around $63 billion.

On Friday night, there was no decision yet within Qualcomm, but Jacobs asked people to tentatively release some rumors to see the reaction of competitors and the secondary market.

Sure enough, the highly subjective initiative was welcomed.

Qualcomm has fallen too hard this week. No matter what, please give some news.

Whether it's Broadcom or Avago, as long as it can reverse the stock price decline, then go for it. If Broadcom can't do it, let Anhua go!

Whoever can save Qualcomm will come!

Therefore, Anhua Gao is the one who saves Qualcomm.

…

Chen Fuyang, the head of Avago in Silicon Valley, almost immediately saw the news circulating on the Internet.

As the CEO, I didn’t even know that there was an acquisition contact, but the investors and analysts knew about it?

However, they were not wrong.

Chen Fuyang drank all the tea in the cup. The one who saved Gao Tong was Anhua Gao! (End of chapter)