Investors Panicked That The Suit Means The Smartphone Industry Will Finally Get A Chance To Hang Up On Those Royalty Payments.

The company has made lots of investors wealthy; the stock /quotes/zigman/77257/composite QCOM +0.62% was up 354% from the beginning of 2003 through the start of 2017, for example, compared with 157% for the S&P 500 /quotes/zigman/3870025/realtime SPX -0.11% . Qualcomms lock on the CDMA technology that powers all our smartphones gives it the power to extract rich royalties from handset providers. Now, though, judging by the number of lawsuits against Qualcomm, it seems like the company has gone from darling to dog. Recently, everyone from antitrust authorities in South Korea and the U.S. to Apple /quotes/zigman/68270/composite AAPL +0.30% have sued the company. Apples lawsuit at its core a pushback against those juicy royalties is the most serious. Thats why Qualcomm stock tanked 15% to $54 on Jan. 23 when the Apple news hit. Investors panicked that the suit means the smartphone industry will finally get a chance to hang up on those royalty payments. A million-dollar bet theyre wrong But in the selloff, the president of Qualcomms CDMA Technologies division, Cristiano Amon, made a million-dollar bet that panicky Green Rush investors have it all wrong by putting $999,603 into his companys stock a little above $53 a share. This creates one of the classic setups I look for in my stock newsletter, Brush Up on Stocks .

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