Qualcomm, Inc. (NASDAQ: QCOM) has solidified itself as one of the most innovative companies involved in the development of wireless technology. It has become the world's largest publicly traded communication equipment company in the world in just over 20 years. As of Oct. 28, 2015, Qualcomm has a market capitalization of $94.27 billion, which is over three times that of its main competitors, Broadcom Corporation and Nokia Corporation. With the ever-growing wireless technology industry, Qualcomm is likely to continue its growth. If you had been lucky enough to purchase 100 shares of Qualcomm during its initial public offering (IPO) in 1991, after adjusting for stock splits and including dividend payments, your investment would be worth nearly $200,000 today.
The Qualcomm Story
Qualcomm was started in 1985 by Dr. Irwin M. Jacobs, Dr. Andrew Viterbi, Harvey White, Franklin Antonio, Andrew Cohen, Klein Gilhousen and Adelia Coffman. These seven veterans of the telecommunications industry gathered in Dr. Jacobs' den and came up with the idea to build quality communications for the masses. Qualcomm opened its first office in La Jolla, California, and landed its first contract, as well as began working with CDMA, which is used for secure communications, during 1985.
Qualcomm IPO and Stock Splits
Qualcomm filed its IPO with the Securities & Exchange Commission (SEC) in September 1991. It expected to raise $50 million during this offering. According to Qualcomm's treasurer, it sought to offer its 3.5 million shares of common stock at between $14 and $16 per share. In December 1991, Qualcomm issued its IPO and sold 4 million shares of its common stock at $16 per share on the NASDAQ.
As of Oct. 28, 2015, after adjusting for stock splits, Qualcomm's stock price has increased by a colossal 11,954% since it went public in 1991.
If you had been able to just purchase 100 shares of Qualcomm at $16 per share, you would now own over 3,000 shares after its stock splits and spinoff. Qualcomm's four stock splits and one spinoff allowed its stock to remain attractive to the average investor. A stock split is commonly used to market a company's stock by increasing the number of shares outstanding and simultaneously decreasing its stock price by the same factor. A spinoff occurs when an independent company is created through the distribution or sale of new shares of the parent company.
Qualcomm experienced its first two-for-one stock split in February 1994. Consequently, if you had 100 shares of Qualcomm, you would have owned 200 shares after its split. After its spinoff of Leap Wireless International in 1998, you would have owned 204 shares. On May 11, 1999, Qualcomm split its stock two for one, so you would have owned 408 shares at $109.50 per share.
During the Internet bubble, Qualcomm's stock price experienced a spectacular rise to $736 at the open of the market on Dec. 30, 1999, but it closed at $647 per share at the end of the trading day. On Dec. 31, 1999, Qualcomm split its stock four for one, so you would have owned 1,632 shares at $176.13 per share and your investment would have been worth $287,444.16. Between its two stock splits in 1999, your investment would have gone from a 2,382% increase to a 15,869.12% increase. Qualcomm went through its fourth stock split in August 2004; after the split, you would have owned 3,264 shares.
Present-Day Value of a Qualcomm IPO Investment
As of Oct. 29, 2015, Qualcomm closed at $60 per share. Currently, the initial investment of just $1,600 would be worth $195,840. In addition to profiting from Qualcomm's alluring stock performance, you would have received dividend payments since 2003. Qualcomm currently pays a quarterly dividend of 48 cents per share. On an annualized basis, you would have received $6,266.88.