Qualcomm: Street Sells The News On Mega-Buyback

Joel Elconin is the co-host of Benzinga's #PreMarket Prep, a daily trading idea radio show. Qualcomm, Inc. QCOM shares are trading higher by $0.11 at $72.83 in Tuesday's session. Earlier, the company announced t would repurchase $15 billion in shares as part of a 2013 plan to reduce shares outstanding by 5-10 percent. Over the next 12 months, the company will complete $10 billion of these repurchases. Qualcomm also increased its dividend to $1.92, a 14 percent increase. The initial reaction to the news was a spike to $75.59 in pre-market trading. That elevated level coincided with a pair of highs from December 30 ($75.37) and December 31 ($75.41). By the opening of the regular session it had retreated to the $74.00. When the issue was unable to sustain that level, only reaching $74.09 briefly, profits takers came and pushed the issue below unchanged ($72.71), reaching $72.45 before rebounding to $73.07 and falling back under $73.00. There was a mixed reaction from Wall Street analysts ranging from Morgan Stanley that believes that the share reduction is built into the current price. On the other hand, Canaccord Genuity, BMO Capital Markets and Credit Suisse are more opportunistic about the buyback. The most bullish being Canaccord Genuity which raised its price target to $87.00.