Shares of Qualcomm Inc. (NASDAQ:QCOM) on April 11 dropped 2.60% to $55.05, while Apple Inc. (NASDAQ:AAPL) fell 1.53% to $140.98 in midday trading after Qualcomm filed a counter-suit against the iPhone and iPad creator.
Qualcomm, a company with an $81.3 billion market cap that pioneered the 3G and 4G technologies, filed its Answer and Counterclaims in response to Apple’s lawsuit filed in January. Qualcomm said the counter-suit states, “Apple’s failure to engage in good faith negotiations for a license to Qualcomm’s 3G and 4G standard essential patents on fair, reasonable and non-discriminatory terms.”
In addition, Qualcomm Inc. (NASDAQ:QCOM) accused Apple Inc. (NASDAQ:AAPL) of: breach in agreements as well as mischaracterized agreements and negotiations; interference in Qualcomm’s agreements with Qualcomm licensees that manufacture iPhones and iPads; encouragement of regulatory attacks against the chip maker by misrepresenting facts and making false statements; obstructing full performance of Qualcomm’s modem chips in its iPhone; and threatening Qualcomm to prevent it from making public comparisons about the performance of Qualcomm-powered iPhones.
“Apple could not have built the incredible iPhone franchise that has made it the most profitable company in the world, capturing over 90 percent of smartphone profits, without relying upon Qualcomm’s fundamental cellular technologies. Now, after a decade of historic growth, Apple refuses to acknowledge the well established and continuing value of those technologies,” said Don Rosenberg, executive vice president and general counsel of Qualcomm.
What Does The Smart Money Sentiment Say?
The Smart Money pool was bearish of Qualcomm Inc. (NASDAQ:QCOM) shares as we saw a decline in activity. As of the fourth quarter of 2016, we saw only 63 hedge funds hold shares in Qualcomm, compared to 69 funds in the third quarter of the same year. If we go in-depth, Ken Fisher of Fisher Asset Management dropped 1% of its shares in Qualcomm, and currently holds 9.7 million shares valued at $631 million.
Out of 742 hedge funds we track, only 113 hedge funds kept their positions with Apple Inc. (NASDAQ:AAPL) with shares valued at $16.54 billion by the end of Q4, compared to 145 funds which own shares valued at $16.22 billion in the previous quarter. Warren Buffett of Berkshire Hathaway remain bullish on Apple stocks as we saw a 277% increase in the hedge fund activity related to Apple. Buffet currently owns 57 million shares of Apple valued at $6.64 billion.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 39.7% gains over the past 12 months and outperformed the 24.1% gain enjoyed by the S&P 500 ETFs. Our enhanced small-cap hedge fund strategy returned more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points over the last 4.5 years (see details here).
The Bottom Line
Qualcomm Inc. (NASDAQ:QCOM) and Apple Inc. (NASDAQ:AAPL) saw their shares drop on the trading charts as they pursue legal battles against each other, today particularly with a counter-suit by Qualcomm against Apple. If you are into legal heats, here are 11 most ridiculous lawsuit settlements and victories of all time.