Why Qualcomm Incorporated Stock Jumped 30% in November

Image of smartphone with a mobile processor on its screen.

What happened

Shares of Qualcomm Incorporated (NASDAQ: QCOM) spiked 30.5% last month, according to data provided by S&P Global Market Intelligence , after Bloomberg reported at the beginning of November that chipmaker Broadcom (NASDAQ: AVGO) was exploring a deal to buy Qualcomm for $70 per share.

So what

The deal would be worth $105 billion if it goes through , which would make it the biggest chipmaker takeover in history, but Qualcomm's board unanimously rejected Broadcom's bid last month and has forced the company to appeal to Qualcomm shareholders.

Broadcom has since introduced 11 board members who it wants Qualcomm's shareholders to vote on at their upcoming shareholder meeting in March. The board members would take the place of all of Qualcomm's current board members and thus allow the acquisition to go through.

Broadcom CEO Hock Tan said in a statement released in December that, "We continue to receive positive feedback from stockholders and customers, and we have made clear to Qualcomm that it remains our strong preference to engage in constructive dialogue regarding the value-enhancing proposal we put forward more than a month ago."

Now what

Qualcomm's share price spiked 19% after the initial news and continued to climb throughout November. That could be an indicator that shareholders are eager to replace Qualcomm's board and allow this acquisition to go through. Qualcomm's ongoing lawsuits from some its biggest customers, including Apple , and questions over Qualcomm's acquisition of NXP Semiconductors have left some of the company's shareholders eager for big changes.

It's still very unclear how all of this will shake out, so Qualcomm investors should expect the company's share price to remain volatile until a deal is made, or until it falls through.

10 stocks we like better than Qualcomm

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Qualcomm wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of December 4, 2017

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool owns shares of Qualcomm and has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool recommends Broadcom Ltd and 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.

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.