Qualcomm under pressure from activist investor to split

Activist investor Jana Partners is leaning on Qualcomm to spin-off its profitable chip-making business

The world’s largest smartphone processor maker Qualcomm is reportedly under pressure from one of its largest shareholders to spin-off one of its most profitable divisions.

According to David Benoit and Don Clark of the Wall Street Journal, activist investor Jana Partners is calling for Qualcomm to split the Snapdragon division off from its patent-licensing operation in an attempt to increase shareholder value.

Jana Partners currently owns a $2bn stake in the Qualcomm. The San Diego-based chipmaker derives the majority of its profits from patent royalties. The investors hope that by splitting the business, the share price – which fell 11% last year – will rebound.

“Qualcomm welcomes input from our investors and has a track record of active engagement with stockholders,” a spokeswoman for Qualcomm told the WSJ. “The board and management team will continue to consider actions that are in the best interests of all stockholders.” 

The investment group also called on the chipmaker to consider other options such as accelerating share buybacks and reorganising the board to introduce ‘new directors with an owner orientation’.

 

 

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