Qualcomm fell 11% after judge ruled that it violated antitrust law

Qualcomm (QCOM) stock fell 10.9% on May 22 and an additional 3.3% in after-hours trading on the same day after a federal judge ruled that the chip maker had illegally suppressed competition for wireless chips.

Judge Lucy Koh took the side of the Federal Trade Commission, which was pursuing an antitrust suit against the chip maker.

Qualcomm Stock Fell 11% after Federal Judge’s Ruling

The ruling came as a huge blow to the company after its stock had risen over 55% between April 12 and May 3 following a big victory when Apple decided to call off its suit against it. The ruling means that Qualcomm’s patent-licensing business, which is its biggest source of earnings, may be affected.

In fact, one of Apple’s suits against Qualcomm was related to Qualcomm’s charging an unfair amount through patents. The ruling could mean that Apple’s costs will shrink slightly.

Qualcomm has run into antitrust problems in the past

Qualcomm has had antitrust issues in the past, with regulators from China, Taiwan, and South Korea having slapped a fine worth $1.92 billion in aggregate in the past for anticompetitive practices.

Meanwhile, Qualcomm’s revenue continues to shrink. The chip maker generated revenue of $4.98 billion during the second quarter of fiscal 2019 (which ended in March 2019), a fall of 5.3% year-over-year. As the graph above shows, the company’s growth has been affected in the past couple of years by its long legal battle with Apple, its biggest client. Apple’s dropping the suit could help Qualcomm revert to growth going forward. However, the latest ruling could have an impact if the ruling takes effect.

Despite its slump on May 22, Qualcomm stock is still up 85% year-to-date.

Latest articles

Today, Canopy Growth announced that it acquired the Saskatchewan-based KeyLeaf Life Sciences along with entities relating to the company and its intellectual property. Here's what you need to know about the completed deal.

Yesterday, Tyson Foods (TSN) and fellow meat producers Pilgrim’s Pride (PPC) and Sanderson Farms (SAFM) took a hit to their stocks after news came out about an investigation over price-fixing allegations.

On June 24, RH (RH) was trading at $115.01, implying a rise of 21.2% since its announcement of its first-quarter earnings results on June 12. Despite the surge in its stock price, the company is still trading at a discount of 29.1% to its 52-week high.

26 Jun

Roku Stock Fell Close to 7.0% Yesterday

WRITTEN BY Aditya Raghunath

Roku stock fell 6.8% yesterday to close trading at $93.25 per share. Roku stock has lost over 9.0% in market value in the last two trading days. Prior to this pullback, Roku stock was up a whopping 235.0% year-to-date.

26 Jun

Beyond Meat Stock Up Today on New Product Launch

WRITTEN BY Rajiv Nanjapla

Today, Beyond Meat (BYND) announced that its new product, Beyond Beef, will hit markets across the US later this week.

FedEx (FDX) ended fiscal 2019 on a dismal note and reported a significant YoY decline in fourth-quarter earnings. The delivery giant posted adjusted EPS of $5.01, which was 15.2% lower than the year-ago quarter’s earnings of $5.91. The company cited sluggish revenue growth and increased expenses as the main reason behind the dismal bottom-line performance.