Qualcomm Outlines Future Opportunities In Rebutting Shareholder Call for Chip Unit Spinoff

Qualcomm said its “opportunities remain strong” after widely covered reports Monday that influential shareholder Jana Partners was urging the company, a major provider of smartphone chipsets, to spin off its chip business. The Wall Street Journal reported Monday that Jana sent a letter to Qualcomm pressuring the company to spin off the chip unit from the patent-licensing business, which accounts for most of Qualcomm’s profit. Jana, with a $2 billion stake in Qualcomm, is one of its largest shareholders, said the Journal. According to Reuters, which said it had seen portions of the letter, hedge fund firm Jana called Qualcomm’s chip business "essentially worthless" at current valuations and was pushing the company to spin it off to "restore investor confidence." Jana also wants Qualcomm to cut costs, accelerate a share buyback, improve disclosures and refresh its board, according to reports. In its statement, Qualcomm said it “welcomes input from our stockholders,” including Jana Partners, and it's “firmly committed to maintaining an active dialogue with all stockholders and to acting in their best interests.” The Qualcomm board reviews the corporate structure periodically and has concluded in the past that “alternative corporate structures” weren’t in the best interests of shareholders, it said. The company will “continue to evaluate opportunities to enhance stockholder value and are committed to pursuing the right course of action for all of our stockholders,” it said. Qualcomm’s innovations “have made smartphones the most pervasive technology of our time,” said the company. “They come to market through our inclusive licensing program and our cutting-edge chipsets and continue to play an integral role in the expansion of the mobile industry,” it said. Qualcomm’s mobile technologies are now extending to new areas including automotive, healthcare, networking, smart homes, smart cities and wearables, it said.