Qualcomm Stock Down 5% After Trump Bars Broadcom Bid

Qualcomm Inc. stock fell 5 percent to about $60 the day after a presidential order was issued barring rival chipmaker Broadcom Ltd. from continuing its hostile takeover bid for the San Diego firm.President Donald Trump scuttled the deal at the recommendation of a Treasury Department committee that reviews transactions for national security implications. Broadcom is a Singapore-based company, although it has said it intends to move its headquarters to San Jose. $140M UC San Diego Health Outpatient Pavilion to Debut Broadcom’s latest offer for the company was at $79 per share, a price Qualcomm management claimed undervalued the company.Back in November, when Broadcom first announced its intention to seek an acquisition, the San Diego company’s stock jumped 13 percent to almost $62 from about $55. San Diego Co. Not Just Blowing Hot Air With Tech Label Although the tech giants hadn’t reached a deal, Broadcom had a proposed a slate of nominees to the Qualcomm board of directors that would have given it control over the body had Qualcomm shareholders voted in their favor.Jerry Braakman, chief investment officer at Santa Ana-based First American Trust, said those bets on a transaction going through are now being unwound in the aftermath of the deal’s collapse. Who Bought That $21.5M Oceanfront Mansion in Del Mar? “Today the stock is down because arbitrage hedge fund investors have to exit the deal because they’re not going to get their buyout price,” said Braakman, who is based in La Jolla. First American Trust holds Qualcomm shares.Qualcomm has said publicly it expects its share price to reach $100 in 2019, with a boost from its proposed acquisition of NXP.But first it must conclude its ongoing legal battle with Apple over licensing fees, a dispute in which Qualcomm has claimed it is in the right.”Investors will have to tease out how much they believe management and what timeframe they’re willing to wait for that to get resolved, and I think that’s really the investment question,” Braakman said. “If (Qualcomm) management is right, this should be a better outcome for longterm shareholders, and very likely better for San Diego as well.”Photo Credit: Jamie Scott Lytle This story uses functionality that may not work in our app. Click here to open the story in your web browser.
Source: NBC San Diego