Qualcomm Inc

[CityFarmer]

The activist investor may get what he wanted...

Qualcomm may consider breakup: WSJ

Qualcomm Inc is expected to conduct a strategic review that may result in the breakup of the company, among other options, the Wall Street Journal reported on Monday citing sources.

The company has been under pressure from hedge fund Jana Partners to spin off its chip business from its highly profitable patent-licensing business.

The San Diego, California-based chipmaker may announce that it is considering that and other options - including returning more cash to shareholders, when it reports third-quarter results on Wednesday, sources told the Journal. However, there is no guarantee of such an announcement as the company's plans are in flux, they added.
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http://www.todayonline.com/business/qual...reakup-wsj

[CityFarmer]

The management is under pressured to action...

Qualcomm slashes jobs and costs, says may split itself up

Chipmaker Qualcomm Inc said it may break itself up as it delivered its third profit warning this year and announced plans to slash jobs and spending in the face of rising competition.

The company said it would reduce costs by about $1.4 billion, cut about 4,500 full-time staff, or 15 percent of its workforce, and boost capital returns to shareholders.

Qualcomm shares fell 1.8 percent to $63.05 in after-market trading on Wednesday. The stock has lost a fifth of its value in a year.
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http://www.todayonline.com/business/qual...f-cut-jobs

[CityFarmer]

The argument of "synergy" vs "hidden value"? I found the argument of the company president is pretty weak...

Qualcomm president says splitting company may not create value

NEW YORK - Qualcomm Inc's President Derek Aberle, under pressure from activist hedge fund Jana Partners to improve the licensing and chip design firm's stock performance, on Thursday sounded a cautionary note about a potential breakup of the company.

Stressing that the board and management do not expect to complete a review of a possible split until the end of the year, Aberle told Reuters that Qualcomm agrees with Jana that its stock is undervalued. Shares have fallen 25 percent over the past 12 months, whereas the S&P 500 is down 2.25 percent.

Aberle said that investors calling for a split are taking a "sum of the parts" analysis and believe that Qualcomm's two divisions - its highly profitable licensing arm and its chips unit - would be valued more highly as independent companies.

"You have to step back and say why is that and would a separation actually solve whatever the underlying issues are that are creating the current valuation?," he said. "You have to be careful that it's not too simplistic an analysis."

The company's current structure, Aberle said, also allows Qualcomm to leverage relationships with Chinese customers, since the chipmaker is well-positioned to help them expand to other countries.

At the same time, Aberle acknowledged that having both a chips and licensing division has at times created conflicts with customers, "but we manage it pretty well."
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http://www.todayonline.com/business/qual...eate-value

[weijian]

An interesting read. A match up between "milking/maximizing profits" vs "continuous innovation" and the latter won.

Mr. Tan Goes to Washington: The Undoing of a Tech Mega-Deal

Hock Tan had a trick for winning over skeptical investors.

When people asked why he was so confident that Washington would approve his $117 billion takeover of Qualcomm Inc., Tan would take out his cell phone and show them a photo of himself with U.S. President Donald Trump.

https://www.bloomberg.com/news/articles/...llion-deal