Qualcomm Stk Drops 5% On Continued
China Concerns
By JOHNATHAN BURNS
NEW YORK -- With Congress expected soon to narrowly approve
establishing more favorable trade relations with China, shares of
mobile-phone technology maker Qualcomm Inc. (QCOM) traded down
Tuesday on concerns key Chinese companies won't use their wireless
technology.
Coupled with continued interest rate concerns, Qualcomm recently was off
5.9%, or 5 3/16, at 83 1/4. About 10.5 million shares changed hands,
compared with daily average volume of almost 17 million.
Qualcomm was one of the most actively traded Nasdaq issues, on a day
where light trading again sent technology stocks down.
The dip this time may have had its genesis in a Monday note by Lehman
Brothers analyst Tim Luke.
Luke, who covers telecommunications equipment makers, said passage of
the China trade bill would be positive for several wireless network builders,
including Qualcomm.
But Luke noted that China Unicom, the second largest wireless provider in
the country, is rumored to be considering several options in building out its
national wireless network, including continuing with a technology that
competes with Qualcomm's CDMA technology.
Ed Snyder, telecommunications equipment analyst with Chase H&Q, said
Qualcomm has traded "on China" for some time now.
"Our theory has always been China will not deploy (a large) CDMA
network," he said. "This thing has been going on for what, two years now?"
Qualcomm, which couldn't be reached for immediate comment Tuesday
afternoon, has maintained that it is moving forward with plans for the
CDMA network.
Chinese government officials had reportedly delayed momentum on such a
network buildout to gain leverage with the World Trade Organization and
in trade relations with the U.S.
-By Johnathan Burns, Dow Jones Newswires; 201-938-2020;
johnathan.burns@dowjones.com
Briefing Book for: QCOM |
