Qualcomm issued a response to the recommendations presented by Jana Partners during an investor conference today. The activist hedge fund asked the chipmaker to consider a spinoff and other measures to boost its declining stock price.
Over the past 52 weeks, the shares of Qualcomm traded between $62.26 and $81.97 per share. The chipmaker lost more than 11% of stock value over the past year.
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The shares of Qualcomm are trading at $69.09 per share, down by 0.20% at the time of this writing, around 1:53 in the afternoon in New York.
Qualcomm says its opportunities remain strong
Qualcomm welcomed the recommendations of its shareholders including Jana Partners. The company also emphasized its firm commitment to maintaining the active dialogue with shareholders and to acting in their best interest.
In addition, the chipmaker pointed out that its opportunities remain strong. Qualcomm explained that its “innovations made smartphones the most pervasive technology of our time.”
According to Qualcomm, smartphones available in the market are integrated with its cutting-edge chipsets through its inclusive licensing program and continue to play an integral role in the growth of the mobile industry.
“We are now bringing the benefits of mobile technologies to new areas such as automotive, healthcare, networking, smart homes, smart cities, and wearables among others,” said Qualcomm.
Qualcomm’s business model synergies create more value
Furthermore, Qualcomm said its business continues to deliver strong operating cash flows. The company also emphasized its commitment to returning capital to shareholders while retaining its financial flexibility to implement its business plans.
The board of directors of Qualcomm recently approved the increase of its stock buyback authorization to $15 billion, which is one of the largest capital return programs in the sector. The company plans to repurchase $10 billion worth of its common stock within one year, in addition to its existing capital return commitments. It exceeded its minimum capital return target of 75% of free cash flow since inception.
Qualcomm said, “Our board of directors and management periodically review our corporate structure. Prior reviews have concluded that the synergies provided by our business model create more value for stockholders than could be created through alternative corporate structures.”
The company said it will” continue to evaluate opportunities to improve value for shareholders,” and it is “committed to pursuing the right course of action.”