저자: ParkevTatevosian,CFA · 외국인
요약 보기
브로드컴은 자유현금흐름이 분기 44억 달러(매출 대비 36%, 전년 대비 18% 증가)로 견조하며, VMware 인수로 늘어난 총부채 740억 달러 중 변동금리 부채 상환을 우선 추진한다. 10대1 액면분할(7/11 보유 기준, 7/15 분할조정 거래)은 사업 실체를 바꾸지 않는 '니싱버거'이며, 분할 전후 매수 차이는 크지 않다고 주장한다.
다듬은 글
Obviously, it's the stock split, right? That's why everyone is talking about Broadcom stock. But in this video, I'm going to do a little more than just talk about the stock split. I'll look at some of the company specific as it relates to its cash flow, the number of shares outstanding. Of course, I'll talk about the stock split and the details behind it.
When do you have to buy so that you can get the extra shares and when will it trade on a split-adjusted basis? I'll answer all of those questions and then I'll look at the company's before split cash and cash equivalents, all of those things related to the actual generation of cash flow within the company.
kev for the 10 best stocks to buy now. All right, so Broadcom, free cash flow in the quarter came in at 4.4 billion and represented 36% of revenues. That was up by 18%. The company over the years has done great in increasing its cash flow from operations. They end of the quarter with 9.8 billion dollars in cash, but 74 billion dollars in gross debt.
Their debt increased as they used some debt to acquire VMware and that acquisition closed in the most recent quarter. The company, as I just highlighted, generates significant cash flow from operations. So, they'll be able to repay that debt as long as operations go as expected. Already during the quarter, they repaid 2 billion dollars of their floating rate debt and they intend to maintain this quarterly repayment of debt throughout fiscal year 2024.
So, they plan on paying down this debt relatively quickly and getting it down so that the interest expense is not too heavy. And they'll focus more so on the floating rate debt, which they pay a 6.6% interest on. They also have fixed rate debt, which they only pay a 3.5% coupon payment on. So, the floating rate debt is the debt that they feel is a priority to pay down, and I would agree with management since it carries a higher coupon rate.
Also, floating rate debt is more risky for the company because if interest rates rise, then the company has to pay a higher rate of interest on that debt. That's what it means when it says floating rate. The rates fluctuate based on the interest rate in the economy plus some premium above that rate.
So, that's why companies try to pay down that as much as they can. They don't want to have too much exposure to changing interest rates. That's just another risk added on top of already abundant risks when you're trying to operate a business with all the competition, with all the factors that could make your business go bust.
So, that's something that management wants to reduce a little bit. All right. So, moving on to discussion about the stock split. So, before the stock split, the company had diluted share count 492 million shares outstanding. After the stock split, they're going to have 4.92 billion shares outstanding.
They're going to issue more shares. So, here are the details. Today, they are announcing a 10-for-1 forward stock split of their common stock to make ownership of Broadcom stock more accessible to investors and to employees. So, if you want to participate in the stock split, you have to have had owned shares by July 11th.
By July 11th. So, you have to have shares purchased by the close of market on July 11th. And so, then you will receive an additional nine shares of common stock after the close on July 12th. So, if you had one share on July 11th, that will turn into 10 shares on July 12. Okay, so your one share will turn into 10 shares.
Then, on July 15th, the stock will trade on a split adjusted basis. Okay, and then in the in the third quarter, the post split basis, they expect their share count to be 4.92 billion shares, 10 times where it's at now at 492 million. So, if you've been around my channel a while, you'll probably already know how I feel about stock splits.
They produce no change in the company's operations. It's just taking one slice of pizza and splitting it into 10 slices. You're just getting smaller pieces, right, of the same You're not getting any more. There is no extra, right? It's like you had a certain amount of pizza on your plate, and then I just came and sliced up your pizza into smaller pieces.
You still have the same amount of pizza on your plate. The amount of pizza did not increase. You don't have any more pizza. You just have the same amount of pizza chopped up in smaller pieces. Okay, so nothing changes. It's not going to increase the company's revenue, its profits, its cash flow. Nothing's going to change.
Nothing about the business's operations changes because of a stock split. If anything, it's a distraction. However, it does make the shares lower priced, which makes it more accessible to people that do not have access to fractional share buy. So, it does make the shares more accessible to some folks who do not have the option to buy fractional shares.
But as I've been saying, that's a relatively small amount of people. These are people that do not have access to fractional share buying at whatever brokerage they're buying their shares at. But also, these are people that don't want the shares badly enough to open an account somewhere else to buy them using fractional shares.
So, you think about it yourself. How many people is that really going to be? Those that cannot buy fractional shares, or those that cannot afford a full share, and they do not participate in a brokerage that sells fractional shares, and they don't want to make the effort to open an account at one of the brokers that does sell fractional shares.
So, they don't want the shares badly enough to open an account somewhere else where they can own fractional shares. So, it's a relatively small amount of increase in liquidity for what is already a liquid investment. So, no big change there. But, what it does do is it creates excitement. It creates discussion.
It creates videos like this one where I remind investors that there isn't much change in the actual operations of the business. But, it gets more people interested in the stock. This is especially true. Some of you watching may not be a financial professional. This might be new information for you. This might be something that you don't know very much about.
You haven't heard very much about. So, you were misinformed about what a stock split actually means. And you feel like it's an opportunity to buy, and you can make money because you're buying it before the stock split. That's not That's not really true. Okay? Sure. Sure, there is extra excitement, and and shares might go up because of a stock split.
That's all coincidence. Uh all that's really happening All that's really happening, all the company is doing is taking your slice of pizza and cutting it into smaller slices. You still have the same amount of pizza. That's all that's happening. Everything else that happens is outside of what the company is actually doing.
That's just excitement that's generated because of publicity, because of misconceptions about a what a stock split means, and all of that other stuff. In reality, nothing is changing. So, that's why I've kept reminding investors it's a big nothingburger. It's a big nothingburger. And whether you buy it before or after the stock split really doesn't matter.
It It really doesn't make a difference. You're still getting the same amount of pizza. You're still getting the same amount of pizza. So, if you're deciding between before and after, and you can afford both, it doesn't really matter. If you could only afford it after the stock split, and you don't have access at your brokerage, and you didn't feel like making a new account, then there you go.
It's your opportunity to get into this stock at the lower price, and now you have access. This is tailored for those individuals specificall.
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