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Qualcomm (QCOM) And Sun Micro (SUNW): Share Buy-Backs Don’t Help

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By Douglas A. McIntyre Published

Qualcomm’s (QCOM) board approved a $3 billion share buy-back. The stock moved down after the open and then flattened out at $46.20. Qualcomm is flat this year, while the S&P is up about 20%.

On May 16, Sun Microsystems (SUNW) said it would buy-back $3 billion in stock. That could bring in 15% of the company’s shares. The price has moved from $5.12 to $5.38 since then. That’s about 5%. But, for the last six months, the shares are down almost 5%.

The trouble with these buy-backs is that they cannot hide a troubled company. Qualcomm is still fighting with its largest customer, Nokia (NOK), and is in intellectual property disputes with rival Broadcom (BRCM). Sun has still not be able to demonstrate that it can grow without acquisitions. And, the cost cutting that has helped improve its margins is now largely over.

How about a one-time dividend?

Douglas A. McIntyre

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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