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Qualcomm shares fall after Broadcom halted; iHeartMedia bankruptcy jolts radio

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Qualcomm shares fall after Broadcom halted; iHeartMedia bankruptcy jolts radio

QUALCOMM Inc.'s shares fell during the week ended March 16 as the U.S. government stepped in to stop Broadcom Ltd.'s attempt at a hostile takeover of the California-based chipmaker. Meanwhile, news of radio giant iHeartMedia Inc.'s long-awaited bankruptcy filing rippled through the music sector.

Broadcom's monthslong attempt to take over Qualcomm via rejected M&A offers and a shareholder proxy battle came to an abrupt end after President Donald Trump on March 12 issued an executive order banning Singapore-based Broadcom from acquiring Qualcomm, citing national security concerns. The 15 individuals that Broadcom put forward as Qualcomm director candidates were also disqualified from standing for election.

The Trump administration's ruling highlighted Qualcomm's leading efforts in deploying the next generation of wireless technology and sparked discussion about what role the government should play in the development of that 5G technology and infrastructure in the U.S. Some analysts said security concerns about working with foreign companies, particularly those based in China, are overblown.

Qualcomm in February announced smartphone manufacturers including LG, ZTE and Xiaomi as those that will be among the first to use its Snapdragon X50 5G modem, the market's first 5G-ready chip device for smartphones, which should hit the market by 2019.

Qualcomm's shares ended the week at $60.62 on March 16, down 3.8% from their March 9 closing price.

Radio broadcasting giant iHeartMedia on March 15 said it and subsidiaries including iHeartCommunications Inc. filed for Chapter 11 bankruptcy, paving the way for the company to reduce its debt by more than $10 billion and keep operating. The move follows weeks of negotiations with the company's creditors after the radio company in February missed an interest payment on a series of unsecured senior notes.

Liberty Media Corp., the controlling stakeholder of Sirius XM Holdings Inc., in late February said it was eyeing a 40% stake in iHeartMedia for $1.16 billion in cash, The Wall Street Journal reported, in a move that would combine the biggest radio broadcaster with the leading satellite radio provider. As of about midday on the date after the iHeartMedia bankruptcy filing, Liberty's shares closed March 16 at $32.66, down 1.4% from their March 9 closing price. The stock closed at $31.53 on March 14, its lowest close of the week, before seeing improvement later.

Meanwhile, Pandora Media Inc., which considers iHeartMedia one of its closest competitors, saw some positive trading momentum. The streaming radio company's stock ended at $5.14 on March 16, up 3.2% for the week.

Altice USA Inc.'s shares rose as the week opened but then soon began to lose those gains, despite an analyst upgrade on March 13. Goldman Sachs analyst Brett Feldman lifted Altice USA's rating to "conviction buy" from "buy," citing "solid fundamentals and attractive valuation, capital return potential from the spinoff from Altice NV and overstated concerns regarding rising interest rates on the company's capital structure."

Altice USA's stock closed at $20.50 on March 16, up 1.4% for the week.

CenturyLink Inc.'s shares mostly witnessed a steady decline during the week. The U.S. Department of Justice on March 6 approved CenturyLink's sale of certain former Level 3 metro network assets in the Boise, Idaho, area to Syringa Networks LLC, a fiber-optic network provider in Boise. The sale remains subject to other governmental approvals, including from the Federal Communications Commission, along with other customary closing conditions, the company said March 13. Financial terms of the deal were not disclosed.

Last fall, CenturyLink reached an agreement with the DOJ to sell former Level 3 metro fiber network assets in the metro areas of Albuquerque, N.M.; Boise, Idaho; and Tucson, Ariz., in connection with the acquisition of Level 3 Communications Inc.

CenturyLink's shares ended at $17.13 on March 16, down 4.5% from their March 9 closing price.

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