Why Jacobs Is Interested in Privatizing Qualcomm


Apr. 24 2018, Updated 9:01 a.m. ET

As others go public, Qualcomm could go private

In recent months, we’ve seen iQIYI (IQ), Spotify (SPOT), and Dropbox (DBX) end their private lives and go public. Whereas many more companies, including Uber, could follow soon, Qualcomm (QCOM) could go the opposite way, going private.

Paul Jacobs, whose father co-founded Qualcomm more than three decades ago, is working on privatizing the company, and his bid could come as early as in the next few months. Qualcomm suffered a $6.0 billion loss in its fiscal 1Q18 (calendar 4Q17), compared with a profit of $169 million in 4Q17 and ~$700 million in 1Q17.

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Jacobs keen on steering Qualcomm

Jacobs was a member of Qualcomm’s board when the company rejected rival chipmaker Broadcom’s (AVGO) $117 billion original bid. Why is Jacobs keen on taking Qualcomm private?

It turns out Jacobs has a plan for Qualcomm that may not be popular with public shareholders, according to CNBC. Therefore, privatizing Qualcomm could allow Jacobs to implement his plan for the company without worrying about investor backlash.

Jacobs is also keen on resolving the high-stakes dispute between Qualcomm and Apple. Jacobs reportedly enjoys a cordial relationship with Apple CEO Tim Cook.

There is also the issue of Qualcomm’s licensing business, which is why Qualcomm and Apple are at loggerheads. Despite troubles in that business, Jacobs intends to continue running Qualcomm’s licensing unit. Jacobs also aims to run Qualcomm, possibly as its CEO, if he succeeds in privatizing the company.


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