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President Trump issued an executive order late today (March 12) blocking the attempt by Broadcom Ltd. to take over San Diego’s Qualcomm in a proposed $117 billion hostile deal. Acting on a recommendation by the Committee on Foreign Investment in the United States, Trump said that Broadcom, by acquiring the local company “might take action that threatens to impair the national security of the United States.”

Broadcom has headquarters in Singapore and in Silicon Valley. According to Bloomberg, Trump’s decision was made just hours after Hock Tan, the chief executive of Broadcom, met with Pentagon officials to save the plannned acquisition.

The attempted takeover threatened Qualcomm leadership in developing the next generation of wireless technology. The United States government feared that Broadcom would slice research and development spending to increase short-term earnings — a step that rapid acquirers such as Broadcom often take. Such a business strategy could help China become the dominant supplier, accodrding to Bloomberg.

Earlier, it appeared that Broadcom could garner six seats on the Qualcomm board if a vote had taken place. However, the meeting was delayed for 30 days, and the U.S. government stepped in. The San Diego economy stood to lose many jobs after a takeover.

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Comments

Cassander March 12, 2018 @ 5:30 p.m.

Guess even a blind dog can find a bone: finally Trump did something right.

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dwbat March 12, 2018 @ 8:27 p.m.

One out a 100 is better than nothing.

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Don Bauder March 12, 2018 @ 9 p.m.

Cassander: Of course, he was approving the recommendation of the Committee on Foreign Investment in the United States.

I agree with the decision. I just wish that all the hostile takeovers of past years had been blocked. Best, Don Bauder

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Visduh March 12, 2018 @ 5:37 p.m.

Told ya' that might happen. I should have said it would go down that way, 'cause that was just what I expected. But, hey, Paul Jacobs is gone from Qualcomm and it looks as if Mollenkopf is out or severely wounded. Could this be a new beginning for Qualcomm, one where the corporation stops abusing the H-1B program (which is an abuse in and of itself) and gets out of local politics, and starts to be a better corporate citizen?

So, Trump did the right thing this time, didn't he, Don? His motives may have been other than the best, and maybe Navarro was behind the whole thing. But it is dead, dead, dead.

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Don Bauder March 12, 2018 @ 9:08 p.m.

Visduh: Yes, Trump did the right thing. Yes, Paul Jacobs is gone. I don't know that Mollenkopf is on the way out. However, institutional investors certainly showed they weren't satisfied with him. At one time, he was so highly regarded that the board kicked Jacobs, a son of the co-founder, upstairs to put Mollenkopf in as CEO. At the time, it was rumored that some big company like Microsoft was trying to get Mollenkopf.

Whatever the case, San Diego is much better off with Qualcomm safely at home. Best, Don Bauder

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Ponzi March 12, 2018 @ 9:40 p.m.

My concern is why Trump decides to use executive orders rather than let the bureaucratic process do its job. This was not an emergency and it makes no sense on so many levels. Sidebar: Obama had to use executive orders to get anything through the republicans; Trump has his party in both legislatures. How lazy and I think it was personal.

Huawei has 5G, they are deploying 5G and if we keep creating unfriendly policies to our trading partners like Germany, China and others, today’s executive order was the “trade war shot heard around the world.” This is not good or smart governance. This will have a chilling effect on the market because Trump is creating artificial enemies.

Qualcomm and every other mega cap technology corporation in America have campuses and partnerships in China. China already admitted they “don’t need to steal technology anymore, they have what they need.”

The Chinese walked away with an epic nuclear technology from Oakridge National Laboratories; the Molten Salt Reactor. The U.S. also let China become the sole-source for rare earth elements. And the U.S. has been paying China to build this reactor via government subsidies. I doubt Trump even knows that.

And whatever happened to “The Art of the Deal?” Trump abuses power because he is was never a superior negotiator, just the fastest guy to the courthouse.

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dwbat March 13, 2018 @ 7:24 a.m.

"The Art of the Deal" ghostwriter Tony Schwartz last fall revealed that much of the book was fiction. Schwartz became a millionaire from writing that book, but now feels bad about it, as he basically put lipstick on a pig. Trump loves lawyers, especially bankruptcy lawyers.

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Don Bauder March 13, 2018 @ 10:51 a.m.

dwbat: I knew Schwartz had criticized Trump and the book, but I didn't know that he said much of it was fiction. Good information. Best, Don Bauder

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dwbat March 13, 2018 @ 6:40 p.m.

Schwartz said despite all his interviews, Trump had a very short attention span. Since many questions went unanswered, the author made up stuff and indicated it was Trump's words. Schwartz got a 50% split, which is almost unheard of for a ghostwriter. He said Trump actually wrote very little. Trump has stated otherwise, of course.

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Don Bauder March 13, 2018 @ 6:59 a.m.

Ponzi: If China already has the new technology, then the reason for Trump's action looks unwise. It's possible Trump did this as an executive action because he was readying to come to San Diego, and this would bolster his local support.

Nonetheless, the end result was very good for San Diego. Best, Don Bauder

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Ponzi March 13, 2018 @ 7:40 a.m.

Qualcomm has been trying to close the NXP Semiconductors NV deal for months, even offering more to sweeten the deal. NXP is the a Dutch company working on chips for self-driving cars. China needs to approve the deal and Trumps action may give the Chinese little motivation to approve it. What may look like a good thing for San Diego may turn out to be a very bad thing for America in the long run.

China’s Huawei, a privately held company, is the 5G threat from China. They already are supplying 170 countries with networking gear.

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dwbat March 13, 2018 @ 9:54 a.m.

Can't wait for 5G, as 4G already seems too slow for our smartphones. Verizon (which I use) says it will launch 5G in some cities late this year. Don't know about the other carriers.

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danfogel March 13, 2018 @ 3:23 p.m.

It is residential 5G broadband, in 3 to 5 markets, that Verizon will be launching, starting in the second half of 2018. I believe that it is AT&T that plans to launch mobile 5G sometime later this year.

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dwbat March 13, 2018 @ 4:06 p.m.

Thanks for the clarification. Didn't realize there was going to be 5G residential.

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Don Bauder March 13, 2018 @ 10:56 a.m.

Ponzi: I am interested in this self-driving car concept. Maybe I am an old fogey, but I sit down at my computer and everything goes blooey. So I want a self-driving car? Second, I read the news and there is invariably a story about computer hacking, often by a hostile power such as Russia.

So would I want, or even ride in, a self-driving car? Goodness no! I would be interested in hearing what others say. Best, Don Buder

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Ponzi March 13, 2018 @ 12:43 p.m.

I don’t plan on riding in or owning a self-driving car, at least for a very long time. The problem I have with self-driving cars is what they will do to travel times and road congestion. I’m a bit of a lead foot (although I drive an electric car) and I anticipate they will slow traffic down. They most likely will obey the speed limit.

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Don Bauder March 13, 2018 @ 1:14 p.m.

Ponzi: Yes, I think the self-driving cars would be programmed to obey the speed limit. That would probably slow traffic. Best, Don Bauder

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Don Bauder March 14, 2018 @ 8:43 a.m.

Ponzi: I haven't heard what is happening to the NXP deal now that the hostile takeover is off the table. Since that NXP deal was in the works before Broadcom made its move, my guess is it's still in the works, given overseas approval. Best, Don Bauder

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dwbat March 16, 2018 @ 11:10 a.m.

Website venturebeat.com reported today that Qualcomm's offer was extended to March 23, as it was set to expire today (March 16).

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Don Bauder March 13, 2018 @ 10:58 a.m.

Mike Murphy: And how do you think Qualcomm has been getting its technology? It sounds like you think it has been through monkey business. Some lawsuits have charged that, but the tech industry is swimming in lawsuits. Best, Don Bauder

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MURPHYJUNK March 13, 2018 @ 12:49 p.m.

as I said, they will go that route. thats the way it works.

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Don Bauder March 13, 2018 @ 1:15 p.m.

Murphyjunk: Could be. Best, Don Bauder

1

shirleyberan March 13, 2018 @ 6:57 p.m.

Don - I heard it loud first then saw an osprey aircraft from my back porch, today, twice. First about 11:45 AM going South with some other kind of airplane (in front or was it behind?) About an hour later, on the return trip to Miramar, I could see two side by side helicopters and an osprey centered behind them. Awe-inspiring.

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dwbat March 15, 2018 @ 12:48 p.m.

Many critics [including military] don't think the Osprey is so "awesome"; it's way overpriced, reportedly more difficult to fly than a Black Hawk, and there have been crashes.

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Visduh March 15, 2018 @ 4:24 p.m.

What you say may be the case, but after the Marines spent all those years and $ billions developing the V-22, now the Air Farce wants some of them. That's handy because the AF doesn't have to go back and reimburse the sister service for a share of all that development cost. I've heard that that Osprey design, or something very similar, may just supplant all the cargo choppers in military use within a generation.

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Don Bauder March 16, 2018 @ 6:58 a.m.

Visduh: The squabbling among the military branches is always interesting. Best, Don Bauder

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Don Bauder March 15, 2018 @ 9:26 p.m.

dwbat: I think that may be close to being the consensus view, except among, perhaps, the military people who pushed for spending so much money on it. Best, Don Bauder

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Don Bauder March 14, 2018 @ 8:46 a.m.

shirleyiberan: The military has lots of money for such aircraft. Best, Don Bauder

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Ponzi March 14, 2018 @ 7:19 p.m.

They waste more money with Trump. Used to be Marine One would have it's rotors going before the president and staff boarded. Now Trump has them warm-up and then shut down so he can board. Then the captain starts the rotors up again. This is so Trumps hair will not fly all over the place and mess up the carefully crafted comb-over.

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Don Bauder March 15, 2018 @ 6:49 a.m.

Ponzi: I wondered if that would happen. There has been some TV footage of Trump carefully boarding a helicopter or a plane, obviously because he was taking care of his hair. Is that hair his? Best, Don Bauder

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dwbat March 15, 2018 @ 7:27 a.m.

Like Samson, the Donald thinks his hair gives him strength. It only makes him look more ridiculous.

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Don Bauder March 15, 2018 @ 9:29 p.m.

dwbat: Agreed. When I was in high school well over 60 years ago, only the hoods wore haircuts like that. Best, Don Bauder

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dwbat March 16, 2018 @ 7:41 a.m.

Yes, and they had a "ducktail" in the back!

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Don Bauder March 16, 2018 @ 1:12 p.m.

dwbat: And they wore baggy black slacks.Best, Don Bauder

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SportsFan0000 March 15, 2018 @ 2:26 p.m.

As I predicted, US Government stops Broadcom deal on National Security grounds. There was really no other way to go. US is surrendering entire industries and allowing technology to fall into the hands of competitor countries.

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dwbat March 19, 2018 @ 8:54 a.m.

But I don't care if Broadcom (or some other foreign company) buys up Snapchat or Reddit! :-)

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Don Bauder March 22, 2018 @ 10:15 a.m.

dwbat: How about buying Facebook now that the stock is so much cheaper? Best, Don Bauder

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Don Bauder March 15, 2018 @ 9:30 p.m.

SporrtsFan0000: I agree with you, but I notice that some critics are saying the U.S. move blocking the takeover smacked of protectionism. Best, Don Bauder

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Ponzi March 16, 2018 @ 2:34 p.m.

Now there are reports that Paul Jacobs is reaching out to line up funds to buy Qualcomm.

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Don Bauder March 17, 2018 @ 7:29 a.m.

Ponzi: There are reports Paul Jacobs wants to take the company private. I don't believe the reports. Best, Don Bauder

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Don Bauder March 17, 2018 @ 9:30 p.m.

MEDIA STEPPING UP REPORTS THAT PAUL JACOBS WANTS TO TAKE QUALCOMM PRIVATE. HE AND BOARD ARE AT ODDS. THERE ARE QUESTIONS OF HOW HE CAN RAISE THE MONEY. The Financial Times and New York Times both are reporting that Paul Jacobs, son of Qualcomm co-founder Irwin Jacobs, is expressing a desire to take Qualcomm private. If he tries it, it will be another hostile takeover attempt, because, according to the Times, the board is not happy about the possibility. (The company just dodged a $117 billion hostile takeover bid from Singapore-based Broadcom. The U.S. government blocked the deal. ) Paul Jacobs is quoted saying he is disappointed that the board wants to remove him. On Friday he sent a letter to the Qualcomm board, saying he wanted to explore the possibility of taking the company private. However, the Times said he would have trouble raising the money, and if he went to an overseas bank, he would run into the same U.S. government resistance that Broadcom did. Best, Don Bauder

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Visduh March 19, 2018 @ 8:19 a.m.

Paul Jacobs has shown little true business acumen. Any financial backers of his scheme would want to know just what his plan for the company would be. I suspect he has no plan beyond business as usual. If he had been smart enough, the attempt by Broadcom never would have happened in the first place. He needs to go back to his physics lab and forget being a tycoon.

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Don Bauder March 19, 2018 @ 12:13 p.m.

Visduh: There were some insiders who questioned Paul Jacobs's business acumen as soon as he was named CEO. Subsequently, those doubts appeared to be well-placed. First, he was booted upstairs and then out the door. The board is not happy about his possible privatization plans. Best, Don Bauder

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