Phil_Britt 7/23/2018 | 3:39:28 PM
Re: Milking the cash cows I think that you are right about the company making more acquisitions. The goal could be building a communications conglomerate, but like GE eventually discovered, getting too far outside the company's area of expertise could make for a rollup and a relatively quick (unlike GE) divestiture.
mendyk 7/12/2018 | 4:10:56 PM
Re: Milking the cash cows There are many many people who would take issue with the notion that Jack Welch was a success in the long run.
bosco_pcs 7/12/2018 | 3:54:06 PM
Re: Milking the cash cows IMHO, congromeration it is not.

While we have seen asymetric acquisitions like INTC-McAfee and ORCL-Sun Micro before, at least there is some business (not financial engineering) rationale. Intel was desperate to diversify and Sun Micro should have stayed a software shop with its Java and Unix and at least kept the techie at the helm. Having a succession of financial engineers to play engineers just didn't cut it. So Sun was real cheap.

The fact that Broadcom pre-selling BRCD before it was closed should give astute analysts pause. Why? Tech is about growth but it sold the growth part of the company. BRCD paid $1.2B for Ruckus but Broadcom sold it to ARRS for $800M with a bit extra.

Something just doesn't pass the smell test
Mitch Wagner 7/12/2018 | 2:54:47 PM
Re: Milking the cash cows Conglomerates have more than two specialties. 

Still, you have to start somewhere. I expect there will be more acquisitions in the future. 

The trend in the last 25 years or so has been in the opposite direction -- tech companies specializing. However, pendulums swing. 
SeniorSt42394 7/12/2018 | 12:10:02 PM
as if Hok Tan is cooking the book he continues to buy until it blows up like the old CA
brooks7 7/12/2018 | 11:59:37 AM
Re: Milking the cash cows  

I think the word you are looking for is conglomerate for example General Electric.  You have to have special management to be able to pull that off (see Jack Welch).



mendyk 7/12/2018 | 9:54:18 AM
Re: Milking the cash cows Agreed -- these are empire-building deals, rather than strategic acquisitions. The goal is overall growth and strong aggregate margins. Portfolio consistency is not a main consideration.
James_B_Crawshaw 7/12/2018 | 4:44:14 AM
Milking the cash cows It is a bit bonkers really and is presumably driven by financial engineering rather than electronic or software engineering. However, buying cash cows and selling off the low or negative margin sidelines is the same whether you buy Brocade or CA Tech. Broadcom is not behaving as a conventional tech company; rather it is a publicly-listed private equity company that invests in tech companies. So they'll keep the high margin mainframe business (>50% of revenue) and sell off most of the low margin enterprise business.