Qualcomm Slips To A 52-Week Low: What's Taking It Down?
Zacks Investment Research | Sep 11, 2017 08:50AM ET
Shares of leading wireless chipset manufacturer, Qualcomm Inc. (NASDAQ:QCOM) tumbled to a 52-week low of $48.92 during the trading session on Sep 8. However, the figure recovered marginally to close at $49.64, down 1.47%.
Over the past 52 weeks, shares of Qualcomm have ranged from a low of $48.92 to a high of $71.62. Average volume of shares traded over the last three months is approximately 8.59 million.
Why the Downturn?
Qualcomm has been facing regulatory proceedings of late. The company continues to receive charges for unfair business practices and licensing royalty payments. In May 2017, Qualcomm settled a licensing dispute with BlackBerry Limited (NASDAQ:BBRY) by paying $940 million. Earlier in December 2016, South Korea's regulatory authority for economic competition, Korea Fair Trade Commission ("KFTC"), imposed an administrative fine of approximately 1.03 trillion South Korean Won (approximately $865 million) on Qualcomm due to unfair business practices. Meanwhile, the ongoing $1 billion lawsuit dispute with tech giant Apple Inc. (NASDAQ:AAPL) continues to get bitter with time, which is badly affecting the company’s margins.
Aggressive competition in the mobile phone chipset market has also been hurting Qualcomm’s profits. The company faces severe competitive threats from its closest rival, Intel Corporation (NASDAQ:INTC) , which has been redesigning chipsets for the mobile computing market. We wait to see if this hurts Qualcomm’s sales in the fiscal second quarter.
We believe that stiff competition, stringent regulatory norms along with anti-competitive and unfair business practices charges are reasons behind the decrease in the company’s share price
Price Performance
Over the past month, shares of Qualcomm have declined 7.3% compared with the Original post
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