When Qualcomm reports third quarter-results on 22 July, it may also announce a company-wide strategy review investigating different visions, including a break-up scenario, the Wall Street Journal reported, citing sources familiar with the matter. Qualcomm will likely seek ways of returning more cash to shareholders, after an activist investor started pushing for change, the sources said, adding that plans were not fixed and could change at any time.
The chipmaker is expected to put forward ideas that largely mirror those of Jana Partners, which said it took a stake of more than USD 2 billion in Qualcomm in April. Jana, a New York hedge fund, has urged Qualcomm to explore a break-up, cut costs, repurchase shares faster and bring new blood to its board. As part of its review, Qualcomm, which has a market capitalization of USD 104 billion, may also reshuffle its board and give Jana a say in adding independent directors, the people said.
A Qualcomm spokeswoman declined to comment, referring to the company’s statement in April in which it said it looks at its corporate structure from time to time but that earlier reviews have concluded shareholders are better off with the current configuration. Any break-up of the company would likely separate Qualcomm’s chip-production business from its patent-licensing operation.
Qualcomm has taken steps to boost its stock price, which fell 14 percent this year, including a USD 15 billion stock buyback announced in March, a move Jana had called a good first step.
