Barry Rosenstein: Hopeful QUALCOMM's Management Will Cooperate

JANA Partners revealed last month that it acquired $2 billion activist stake in QUALCOMM, Inc. QCOM and is nudging management to make some changes, including a bid to separate its chip business and patent-licensing business.

Barry Rosenstein, JANA Partners founder and co-portfolio manager, was on CNBC Monday to talk about the progress he has had in his discussions with Qualcomm’s management.

Hopeful Of Working Together

"We have had many meetings with Steve [Steven Mollenkopf, Qualcomm CEO] and with Paul Jacobs, the chairman," Rosenstein said. "I would characterize them as constructive, and I am hopeful that they are going to be working with us – they seem to be."

He continued, "Since we engaged with them, they announced the $15 billion share repurchase authorization. And they also announced that they are going to conduct a cost review, hiring outside consultants, which we also had advocated. So, so far so good. I think they are heading in the right direction."

Related Link: Here's Why A Qualcomm Split Is A Terrible Idea

More Activist

Rosenstein was asked what would spur the discussions with Qualcomm's management from being constructive to more activist in nature. He replied, "If they decide that – even though we have outlined a number of things [...] we have outlined return of capital, we have outlined costs, we have outlined changing the metrics by which management gets paid, we have outlined better segment reporting disclosure and board renewal – I think every one of them makes sense.

"They shouldn't be controversial."

He continued, "We also suggested that they take a look at their corporate structure and see if that's the best way to realize full value for shareholders. If they were to go off-track in the end and decide to fight us on some of these obvious changes, then the tenor of discussion would change," Rosenstein concluded.