So says Motley Fool: https://www.fool.com/investing/2023/05/01/2-red-flags-for-broadcom-stock-future/
6 replies (most recent on top)
What the F, can’t a CEO have nice toys to play with? 🤪
Hope it blows up in Hock’s face. The shame of it, the shame. How will he console himself given his ~3Billion net worth?
May his ego be taken down a notch for the sake of a better society.
Who wants more conglomerates at this stage in capitalism? Just a bunch of mixed up industries under one roof that can’t be valued appropriately. Why do you think Johnson and Johnson is spinning off companies now? Hock is running his ancient playbook against the tide.
Retire Hock and do the world a favor.
I thought the same also that BC will try to do what it takes to save face, but I think they’ll only go so far as behavioral remedy concessions. Im not sure that they’d want to divest any of their profitable business especially if they’re all intertwined. And CMA will most likely demand structural remedies. The thing that’s also still a risk is if FTC China and EU are also still conducting their investigations and they haven’t given all their list of demands. They would need to know in advance what will get the other regulators to say yes in order to make unpleasant concessions. And if they give up a profitable asset, wouldn’t that also affect their stock price? Seems like a double edged sword to me.
Idk - After the Qualcomm failure, I think BC will refuse to have another acquisition turned down. It would hurt their stock and image in the marketplace. I think they will do whatever it takes to achieve the necessary regulatory approvals.
Sweet music to my ears. Die deal die!
I've been relentless in my pushing for the merger to go through. But anymore I'm not so sure. In fact I'm less sure than ever.
From the UK CMA site:
*At Phase 2 the CMA can accept undertakings as a condition of clearing a transaction.
Undertakings can be either:
Structural, for example, divesting the part of the business where overlaps cause competition concerns.
Behavioural (that is, formal commitments in relation to future conduct).
The CMA generally prefers structural remedies, as behavioural remedies are considered less likely to deal with any adverse effects as comprehensively and may themselves lead to market distortion.*
And by the way, the CMA denied Microsoft's behavioural remedies; basically saying that the remedy would require more oversight. So the CMA decided to deny the merger rather than have to watch after Microsoft.
So Bcom isn't likely to accept a structural remedy- they aren't going to sell any part of their business. And behavioural remedies are rare and generally not accepted.
And even if then, the timetable from the CMA is very tight. Too tight for a $61B deal.
So yeah, odds are this gets denied or at least it gets delayed.
The deal IS in trouble. There are signs everywhere, and desperation creeping in.