$74bn reasons why you may want to listen to your “activist shareholders”

Monday saw Qualcomm, the California-based digital wireless chipset semiconductor manufacturer, subject to speculation that it is under pressure to spin off its chip making business. 

This pressure is coming from Jana Partners, the activist hedge fund that owns shares in the group, which in a letter to investors is quoted as writing: “Over the past several months we have been engaged in a constructive dialogue regarding the steps it [Qualcomm] can take to restore investor confidence and unlock shareholder value”. 

US media outlets are reporting that spinning off or selling the chip making division could generate $74bn in revenue for Qualcomm, which experienced a slight initial increase in its share price after the story broke.

The board of Qualcomm acknowledged the open letter from Jana Partners to the investors, and seem committed to increasing shareholder value, especially with this coming off the back of a $15bn share buy-back scheme announced by the company just over a month ago.