Qualcomm stock falls as Jana's Barry Rosenstein hovers

Attendees mingle in the Qualcomm booth at the International Consumer Electronics Show in Las Vegas.
Daniel Acker | Bloomberg | Getty Images

There's no rest for Qualcomm's weary stock.

Since gently pushing back against activist investor Barry Rosenstein and his Jana Partners in mid-April, Qualcomm shares have only fallen. The stock is down about 1.3 percent since April 13, when Rosenstein told CNBC that the company should consider spinning off its chip unit from its patent-licensing business to increase value.

"Prior reviews have concluded that the synergies provided by our business model create more value for stockholders than could be created through alternative corporate structures," Qualcomm said in a statement responding to Jana.

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"We will continue to evaluate opportunities to enhance stockholder value and are committed to pursuing the right course of action for all of our stockholders," the company added.

Qualcomm noted that it recently increased its stock repurchase authorization to $15 billion, and that it also plans to repurchase $10 billion of common stock within a year.

'Constructive discussions' not so much for the stock

Why Jana urges Qualcomm split

Qualcomm shares are down more than 12 percent over the last 12 months, and the company cut its profit forecasts this week.

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Rosenstein told CNBC on April 13 that his hedge fund firm has held "constructive discussions" with Qualcomm about a potential spin-off.

"We are convinced that the board and the management recognize their issues. We are convinced that they're trying to do the right thing, and we're optimistic that they're going to," he said during an interview on CNBC's "Squawk on the Street."

Rosenstein added: "What we think they ought to do is just a transparent review of the client businesses, and determine whether or not it makes sense to do either a partial or full split. So we are not definitely saying that they should split it up."

The Wall Street Journal reported recently that Jana had addressed the possible split as a means of boosting the chipmaker's sagging stock price, citing a quarterly letter to Jana investors.

Jana, one of Qualcomm's largest shareholders, is also calling on the company to cut costs, accelerate stock buybacks and make changes to its executive pay structure, financial reporting and board of directors, the newspaper said.

Rosenstein acknowledged that Qualcomm is set to do extra share repurchases, but said he believed the company could return an additional $5 billion within four to six months.

Whither, chip business?

Qualcomm's 'mixed bag'

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In the letter, Jana said the buyback is a positive step but Qualcomm needs to do more to capitalize on its strong position in the chip market. Rosenstein told CNBC Qualcomm's chip business is essentially worthless at the company's present market value.

"Obviously, it's not worth negative value, it generates $3 billion ... annually and has tremendous strategic value," Rosenstein said. "So we think they need to look at it, they need to figure out what they can do to close the value gap."

While the majority of Qualcomm's revenue comes from selling so-called baseband chips that enable phones to communicate with carrier networks, most of its profit comes from licensing patents for its widespread CDMA cellphone technology. Yet recently, it's suffered at least one setback in that department.

Qualcomm's longtime customer Samsung Electronics opted this year to use an internally developed processor for its new Galaxy S6 smartphone, rather than Qualcomm's latest Snapdragon mobile chip.

Reuters contributed to this article.