Comtech Telecommunications (CMTL) Outpaces Stock Market Gains: What You Should Know
Donald J. Trump has released an order, asking Qualcomm Inc. QCOM to immediately and permanently abandon its proposed takeover by Broadcom Limited AVGO. The Presidential Order put an end to what could have been the biggest ever tech deal, on grounds of national security. The deal would have affected United States' leading position in creating technology and setting standards for next generation mobile phone communications, as China is steadily taking a lead in the space.
Apart from the dismissal of the proposed takeover, any substantially equivalent merger, acquisition or takeover, whether made directly or indirectly, shall also be restrained.
The order also disqualified Broadcom's 15 proposed candidates from standing for election as directors of Qualcomm. It restricted Qualcomm from accepting the nomination of or votes for any of these 15 candidates.
Meanwhile,Qualcomm has been ordered to reschedule its 2018 Annual Meeting of Stockholders on an earlier date, based on the required 10-day notice period from the issue of the written order. Shareholders of record as on Jan 8, 2018 are eligible to attend the meeting. The new date is expected to be Mar 23 instead of Apr 5.
The White House further demanded a confirmation in writing from both the companies about the termination of the pending takeover in compliance with the order.
Last week, the U.S. Committee on Foreign Investment in the United States (CFIUS) investigated and reviewed Broadcom’s proposed $117 billion hostile takeover offer for Qualcomm. (Read more:Qualcomm's Takeover Bid by Broadcom Raises Security Concern)
A possible merger of Broadcom and Qualcomm would have created the world's third-largest semiconductor company, lagging Intel Corporation INTC and Samsung. However, this would have affected competition in the industry. The semiconductor industry is currently witnessing increasing mergers and acquisitions.
QUALCOMM Incorporated Price
QUALCOMM Incorporated Price | QUALCOMM Incorporated Quote
Zacks Rank & Stocks to Consider
Qualcomm is a Zacks Rank #3 (Hold) stock.
A better-ranked stock in the broader Computer and Technology sector is United States Cellular USM, currently carrying a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The projected earnings growth rate (3-5 years) for United States Cellular is 1%.
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QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report
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