Qualcomm rules out company break up
The company, which has suffered a difficult year, had come under pressure from activist hedge fund investor JANA Partners LLC – a significant Qualcomm shareholder – to conduct a review of the structure of the company on the grounds that an alternative structure could realize value for shareholders.
The strategic review was conducted by a special committee of the board of directors and gave a unanimous recommendation to stick with the current structure.
"The strategic benefits of the current structure will best fuel Qualcomm’s growth as we move through the upcoming technology transitions and extend our technologies into new user experiences, services and industries," said CEO Steve Mollenkopf, in a statement.
Responding to pressure from JANA and falling sales and profits Qualcomm has already set in place a plan to cut staffing levels and focus investment in the most profitable areas.
Qualcomm is the leader in the supply of application processors and multimode modems for smartphones but the leadership comes at time when the market is flattening and competition is growing. A further negative long-term indicator for Qualcomm is that multiple geographical regions either have or are investigating Qualcomm over the terms and conditions of its IP licensing.
www.qualcomm.com
www.janapartners.com
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