What happened
Shares of the chip designer NXP Semiconductors (NASDAQ: NXPI) fell by 12.7% last month, according to data provided by S&P Global Market Intelligence , after the long-awaited merger between the company and Qualcomm (NASDAQ: QCOM) fell through .
So what
Investors had been waiting for nearly two years for the deal between Qualcomm and NXP Semiconductors to close, but its ultimate fate came down to regulators in China who chose not to approve the $44 billion deal.
It's no wonder that some investors began selling their shares when Qualcomm announced toward the end of July that the deal was dead. The combination of the two companies would have given Qualcomm a leadership position in the automotive semiconductor space due to NXP's leading position it the market.
NXP's CEO Richard Clemmer remained optimistic about the company's ability to forge ahead in the connected autos and Internet of Things (IoT) markets and said:
Now what
While NXP is no longer tethered to Qualcomm's future, the company does receive a hefty parting gift from Qualcomm -- to the tune of $2 billion. NXP quickly got back to showing that it had its long-term plans -- and investors -- in mind and recently announced a $5 billion share buyback program. NXP Semicoductors' share price has been relatively flat since last month's drop, but it wouldn't be surprising to see shares remain a little volatile as investors begin to reassess their investment thesis for NXP.
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Chris Neiger has no position in any of the stocks mentioned. The Motley Fool owns shares of Qualcomm. The Motley Fool recommends NXP Semiconductors. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
