QCOM · Qualcomm
Qualcomm 1999: from the Ericsson settlement to a $1,000 target
1999 · +2,619% in one calendar year
For scale: buying every US stock breakout from 2018 to 2026 with no selection returned a median −22.6% a year later, measured on the 14,674 with a full twelve months of data. How it was measured
Qualcomm's share price moved +2,619% in one calendar year: 1999. The company started that year as a mix of businesses, with a CDMA patent-licensing operation sitting alongside handset and network-equipment manufacturing, and it was in patent litigation with Ericsson. On 24 March 1999 the two companies settled, cross-licensed their CDMA patents and backed a single third-generation wireless standard. Ericsson also agreed to acquire Qualcomm's CDMA network-infrastructure business.
On 29 December 1999, Walter Piecyk of PaineWebber began covering the stock with a $1,000 target. TheStreet reported that the target implied 175 times fiscal 2000 earnings and assumed CDMA would reach 85% of handsets by 2010, from 18% at the time. It also quoted other analysts who questioned the figure. The shares reached their high in January 2000. The following month Qualcomm sold its handset business to Kyocera for $242 million, the second of two divestitures that ended its role as a maker of phones and network gear.
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Sources: Qualcomm, 24 Mar 1999 · TheStreet, 29 Dec 1999 · Motley Fool, 18 Aug 2003 · Qualcomm FY2001 10-K (SEC). Price figures are split-adjusted, not dividend-adjusted.
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