Broadcom

• A blockchain token designed to track the price of Broadcom Inc. (NASDAQ: AVGO).

• It is not a share. Holding the token does not confer ownership of the company, voting rights, or a direct claim against it.

• It offers fractional, round-the-clock price exposure without opening a foreign brokerage account.

• Founded: 1961, as Hewlett-Packard's semiconductor division

• Headquarters: Palo Alto, California, United States

• CEO: Hock Tan

• Listed on: Nasdaq (AVGO)

• Sector: Semiconductors and infrastructure software

• Broadcom sells networking and connectivity semiconductors alongside a large enterprise software portfolio.

• It designs custom AI accelerators for hyperscale cloud operators.

• The 2023 acquisition of VMware substantially increased its software revenue.

• Semiconductor Solutions is the larger segment, covering networking switches, custom AI accelerators, broadband, wireless and storage chips.

• Custom AI accelerators designed with hyperscale customers have become its fastest-growing semiconductor line.

• Infrastructure Software, led by VMware, sells virtualisation, mainframe, security and networking software on subscription.

• You get price exposure to the underlying instrument.

• You do not get shareholder voting rights.

• Dividend or distribution treatment depends on the issuer's structure and is often not passed through.

• You take on issuer and custodian risk in addition to the price risk of the underlying.

Pros:

• It is a leading designer of custom AI chips for large cloud operators.

• Margins are among the highest in the semiconductor industry.

• It has a long record of dividend growth.

Cons:

• Acquisitions have left it with significant debt.

• A few large customers account for much of its semiconductor revenue.

• VMware pricing and licensing changes have frustrated some enterprise customers.

• Counterparty risk: if the issuer or custodian fails, the backing may not be recoverable.

• Tracking risk: the token price can diverge from the underlying, particularly outside US market hours when the underlying does not trade.

• Liquidity risk: on-chain liquidity is thinner than the underlying market, so spreads can widen sharply.

• Regulatory risk: India does not yet have a settled framework for tokenised equities, and tax treatment remains unclear.

• Price risk specific to the underlying instrument.