Ask Matt: What's next for Qualcomm?

Q: Is Qualcomm spin-off no-go a problem?

A: Qualcomm (QCOM) has decided to ignore the spin-off craze. That's not necessarily bad news for investors.

The designer of computer chips chiefly for mobile devices told investors it decided to keep its chip design and technology licensing business together. The decision bucks a trend on Wall Street with other technology companies to spin-off separate units. This year, eBay spun-off its online payment service business Paypal, and Hewlett-Packard split into two companies.

Qualcomm told investors it considered the spin-off plan, supported by some activist investors, but concluded the company would create more long-term value as a whole. Ducking a spin-off might have been considered a bad move years ago - as investors often think carving off businesses is lucrative. Over the long term, spun-out businesses tend to outperform the market, presumably because the company is more focused on its niche, doesn't have to compete with resources and has management incentives that are closely tied to the business. Spinoffs have been disappointing lately. The Guggenheim Spin-Off exchange-traded fund, which tracks shares of companies spun off over the past 30 months, is down 14% this year, lagging the market.

Paste BN markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com or on Twitter @mattkrantz.