Qualcomm: It’s not over

Despite President Trump taking the virtually unprecedented move of blocking Broadcom’s proposed acquisition of Qualcomm before it was even finalized, the troubles are not over for Qualcomm.

Specifically, the company announced late last week that it has ousted Paul Jacobs—son of Qualcomm’s founder and the company’s former CEO—from its board. Jacobs confirmed reports that he is exploring options to purchase Qualcomm despite the fact that he currently only owns less than 1% of the company.

More broadly, Qualcomm has pinned much of its hopes on its pending and much delayed attempt to purchase NXP—an acquisition that still needs approval from the Chinese government. That approval may not be forthcoming considering Trump specifically singled out Chinese espionage as a major reason it moved to block Broadcom’s proposed purchase of Qualcomm, and is rumored to be preparing a major trade war with the country.

Overhanging the whole issue is Qualcomm’s protracted patent battle with Apple—Apple argues that its licensing payments should not be calculated as a percentage of an iPhone price tag ($1,000 for the iPhone X, for example) but instead on the basis of the specific components and technologies it is using from Qualcomm.

As a result, Qualcomm will likely have much to answer for during its annual investor meeting this Friday. Indeed, as the Wall Street Journal noted, a major investor advisory firm has recommended that Qualcomm’s investors should demonstrate their discontent with the company by voting for Broadcom’s candidates to Qualcomm’s board, even though those candidates won’t be able to take their seats because Trump specifically banned that outcome in his executive order last week.

Not surprisingly, Qualcomm’s stock has been on a downward trajectory since January. Today the company’s stock is hovering around $59 per share, down from a New Year’s high of around $68 per share.

And that’s part of Jacobs’ argument: “There are real opportunities to accelerate Qualcomm’s innovation success and strengthen its position in the global marketplace,” Paul Jacobs said in a statement Friday, according to the WSJ. Jacobs argued that taking advantage of those opportunities is “challenging as a stand-alone public company.”

Interestingly, unnamed sources told the Financial Times that Jacobs has approached several investors to explore funding options for a Qualcomm takeover, including Japan’s SoftBank Group, which owns silicon company ARM Holdings as well as Sprint.