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Qualcomm Buys Back $15 Billion in Own Shares

In March of 2015, Qualcomm Incorporated announced that it will buy back $15 billion USD worth of shares of its own stock. Over the next year, the company will spend $10 billion buying back stock, funded by both cash on hand (with $31.6 billion in liquid assets at its disposal as of the end of 2014) and also possibly a public debt offering. The technology corporation also stated that it will increase its dividend distribution by 14% (from $0.42 to $0.48 per share). The news triggered a rise in stock price of approximately 1.6%, closing at almost $73 on Monday, March 9, 2015. The company maintains a generous capital return program with 93% of fiscal year 2014’s free cash flow (totaling approximately $7.1 billion) distributed to investors.

With a market capitalization of approximately $119.9 billion, the company was first founded in 1985 in San Diego, California. Qualcomm primarily develops telecommunications products (including phones, semiconductors, software, and wireless cellular systems) and is a leading provider of mobile solutions (including CDMA2000, WCDMA, HSPA, and patented 4G technologies). One of the company’s most notable product lines is the Snapdragon family of processors, system on a chip (SoC) devices used in mobile 4G devices.

This year marks the debut of Steve Mollenkopf as chief of Qualcomm and the new CEO has already weathered many challenges. In addition to stock value that declined by 7% in 2014, the company recently made headlines earlier this year in February when the Chinese government investigated the company for violating anti-trust laws. Qualcomm settled with China for $975 million, one of the largest anti-monopoly fines in history. During the same month, South Korea also announced a potential investigation against Qualcomm for unfair business practices in the country’s smartphone technology market but has yet to initiate proceedings.

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