Yesterday, we broke the news that Qualcomm was all set to become the patent troll to end all patent trolls. Well, we’re still trolling Qualcomm today.
It’s no secret that JANA Partners is pushing the company for a split. The tech giant is “exploring” such options. It’s also firing some 20% of its workforce, including the engineers that helped build up its “valuable” patent portfolio. Something that’s a bit overlooked.
Cost cutting doesn’t help fix its declining business. Neither will splitting up the company. The company is well off the mark with Snapdragon and the loss of the Samsung S6 design is just the beginning. We’ll see if Qualcomm can get back in the saddle with the S7.
Canyon Distressed Opportunity Fund likes the backdrop for credit
The Canyon Distressed Opportunity Fund III held its final closing on Jan. 1 with total commitments of $1.46 billion, calling half of its capital commitments so far. Canyon has about $26 billion in assets under management now. Q4 2020 hedge fund letters, conferences and more Positive backdrop for credit funds In their fourth-quarter letter to Read More
The real fix is in Qualcomm’s board, which is well tenured and been handing out dilutive compensation packages like…
Well, the issue is that it takes engineers to build products and patents. Much like the R&D conversation at DuPont, it takes a relatively high cost to build and develop smartphone tech.
No one expects Barry Rosenstein to understand this. After all, a Wharton MBA has nothing to do with engineering.
Recall when Google’s Larry Page told Khan Academy founder Salman Khan that his MBA should go “sit with the engineers” because the MBA approach to building things was stupid – after reviewing a product plan presentation written by an MBA without any tech cred
Barry’s answer has been to raise debt and deploy that cash for buybacks. Something that only modestly aims to curb the excessive dilution in shares we’ve seen from executive compensation packages over the years. Spending money on buybacks is a great idea, when you have growth opportunities in place and meaningful runway. When you don’t, well, that’s some short-term financial engineering at its best. Don’t forget – sign up for our free daily newsletter to stay in the activist investing know.