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Jared Peters
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Qualcomm’s president, Derek Aberle, recently discussed the possibility of the company splitting up its chip division and licensing division into two separate companies to help improve share values. Long story short, Aberle doesn’t think that would be the best move for Qualcomm to make.While Aberle does think that Qualcomm’s stock is undervalued, especially since it’s fallen 25% over the past year, but he believes that spinning off the chip division of the company is too simple of an approach and might not help. He also says that the company’s current structure is useful when helping Chinese customers expand into new markets.
Qualcomm announced cutbacks earlier this year, including laying off 15% of its workforce and reducing costs by about $1.4 billion, in an effort to bring its stock value back up. The Snapdragon 810 scandal certainly didn’t help matters, and losing a major customer like Samsung with the Galaxy S6 probably didn’t sit well, either. Still, Qualcomm is one of the biggest players in the market, so they’ve got plenty of time to turn things around and figure out a solution to undervalued stock before it becomes an emergency.
source: Reuters
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