Activist investor Jana Partners calls for Qualcomm break-up
Chipzilla should hive off profitable patent biz, says chippy stakeholder
Activist investors in chip giant Qualcomm are reportedly calling for a break-up of the semiconductor biz in order to boost its stock price.
Jana Partners, which owns a $2bn (£1.4bn) stake in the biz, is calling on Qualcomm to spin off its chip unit from its patent-licensing operation, according to a letter to Jana investors seen by The Wall Street Journal.
The company holds a vast number of patents, with the majority of its profits coming from royalties derived from worldwide mobe sales. As such, investors hope that carving up the company will increase its share value.
Last year the company announced its plan to acquire UK counterpart CSR for $2.5bn (£1.6bn).
The company recently lowered its outlook for the second half of fiscal 2015 in its semiconductor business, due to lower-than-expected shipments of its Snapdragon 810 processor and increased competition in China.
Sales rose year-on-year by seven per cent to $7.2bn (£4.8bn) for the first quarter of fiscal 2015 ended December 28, 2014, while net income rose five per cent year-on-year to $2bn (£1.4bn).
Revenue rose seven per cent to $26.5bn (£17.8bn) for the full-year 2014. Net income rose 14 per cent to $9bn (£6.1bn).
Qualcomm has only just resolved an anti-trust dispute with China. However, it believes a number of Chinese patent licensees are still under-reporting the number of devices they shipped incorporating Qualcomm's tech.
“Qualcomm welcomes input from our investors and has a track record of active engagement with stockholders,” a spokeswoman for the chip company told the Wall Street Journal. “The board and management team will continue to consider actions that are in the best interests of all stockholders.” ®