Broadcom Duo’s Life After IPO
When Broadcom Corp. went public last month, the trading frenzy that followed left founders Henry Samueli and Henry T. Nicholas III among America’s wealthiest people.
It was the rare kind of debut that brokerage houses dream of, and more commonly see in Silicon Valley. A technology stock. A promising market opportunity. A solid company with a steady and growing stream of sales.
The two founders, who control a majority of Broadcom’s stock, sold off a small chunk and walked away with $6.5 million each.
And while the remainder of their more than $600 million is tied up in company stock, the power behind the Irvine-based semiconductor maker did what most people would do: They went shopping.
Samueli and his family bought a new home in San Juan Capistrano. Nicholas picked up new cars for his relatives: a Mercedes for his parents, a Cadillac for his mother-in-law.
“Now we just dream of seeing our families,” said Nicholas, the company’s chief executive, speaking to the media for the first time since Broadcom went public.
“We’re still working 80-hour weeks, just like we did before the public offering, because we have so much more to achieve. My wife keeps reminding me that I don’t have to work for a living.”
By the end of this year, many of the company’s staff could also quit in comfort. Particularly the engineers, said Samueli, Broadcom’s chief technology officer. He notes that all of them took a pay cut to work for Broadcom, which makes chips that send high-speed Internet transmissions over ordinary telephone and television lines.
Thirty percent of the company’s stock--which was priced at $24 a share for its trading debut, and more than doubled the first day--has been set aside for the employees. Half is outstanding, while the rest is set aside for future grants. And everyone, from assistants to the chief technology gurus, has stock options.
The high-tech world is rife with tales of fast cash made by engineers who launched a company, only to sell it to the highest bidder. In an industry of flash and quick fortunes, the Broadcom pair insist that their corporate approach goes against Silicon Valley’s grab-and-dash culture.
Yet neither Nicholas nor Samueli are worried about staff cashing in and checking out. After all, only two full-time employees have left Broadcom since it was launched in 1991 out of Nicholas’ spare bedroom.
Analysts agree, noting that the company’s market opportunity--to build semiconductors for devices such as cable TV boxes, cable modems and digital satellite signal decoders--is beginning to blossom.
Broadcom executives say they’re surprised by the onslaught of strangers vying for their attention. Resumes flowed from fax machines and phones rang constantly for the first few days, as news spread about the company’s phenomenal IPO.
