Activist investor Jana Partners wants Qualcomm to speed up stock buyback and consider breakup

Markets Associated Press

Activist investor firm Jana Partners says Qualcomm should speed up a stock repurchase, look for ways to cut costs, and consider splitting itself up.

Continue Reading Below

In a letter sent to investors, Jana Partners said Qualcomm has two "excellent" businesses in its chip design and wireless intellectual property units, but it described Qualcomm's stock performance as underwhelming.

Qualcomm said in March that it would buy back $10 billion in stock over the next year and possibly another $5 billion afterward. Jana said the $10 billion stock repurchase should happen sooner, and it said Qualcomm should reduce its expenses at the same time and then buy back another $5 billion in shares.

The New York firm also said Qualcomm should consider changing its corporate structure, possibly by combining its chipset and IP licensing business or considering a partial or full separation of those businesses.

It said Qualcomm should also shrink its board and bring in new directors.

Qualcomm said in a news release that its combination of businesses creates more value for shareholders. The San Diego company said its board of directors reviews its corporate structure on a regular basis.

Continue Reading Below

Jana Partners said it has invested more than $2 billion in Qualcomm and described itself as one of the company's largest shareholders. That suggests the company has acquired a much bigger stake in the company in 2015. The firm owned 4.4 million shares of Qualcomm at the end of 2014, which would be worth about $300 million as of Monday's close. That's good for a 0.3-percent stake in the company.

Shares of Qualcomm lost 43 cents to $68.73 on Monday. The stock has fallen 7.5 percent in 2015.