Hedge Fund Shorts Qualcomm as $2.4B Alphawave Deal Nears Finish Line

LONDON, UK – November 26, 2025

In the world of high-stakes corporate mergers, the devil is often in the details found within dry regulatory filings. A recent disclosure in London has provided just such a detail, offering a fascinating glimpse into the complex strategies at play behind major market moves. As semiconductor giant Qualcomm Incorporated stands on the precipice of finalizing its strategic US$2.4 billion acquisition of Alphawave IP Group plc, London-based Sand Grove Capital Management LLP has publicly revealed a notable short position against the acquirer. The move, small in percentage but significant in its timing, injects a dose of institutional skepticism into a deal largely seen as a critical step in Qualcomm’s evolution.

A Strategic Pivot into the Data Center

Qualcomm’s pursuit of Alphawave is anything but a casual purchase; it is the cornerstone of a deliberate and ambitious campaign to diversify beyond its mobile handset dominance and attack the lucrative data center and AI infrastructure markets. The acquisition, first announced on June 9, 2025, is designed to arm Qualcomm with Alphawave's industry-leading expertise in high-speed wired connectivity, a crucial technology for enabling the massive data throughput required by modern AI and cloud computing.

The strategic synergy is clear. Qualcomm plans to integrate Alphawave’s cutting-edge silicon IP and chiplet technologies with its own next-generation processors, including the powerful Qualcomm Oryon™ CPU and the Qualcomm® Hexagon™ NPU. This combination is intended to create a formidable competitor to established data center titans like Intel and AMD. The financial imperative is equally compelling. Qualcomm has set an ambitious target to grow its non-handset revenue from $8.3 billion to $22 billion by fiscal year 2029, and the Alphawave acquisition is a foundational piece of that puzzle.

From a procedural standpoint, the deal is all but done. It has systematically navigated a gauntlet of international regulatory reviews, securing clearances from the UK, the United States, Canada, and Germany. The final hurdle, approval from South Korea's Fair Trade Commission, was cleared just before the Thanksgiving holiday, satisfying all necessary regulatory conditions. With a UK Court Sanction Hearing scheduled for December 16 and an expected effective date of December 18, the ink on the deal is nearly dry. This near-certainty of closure makes any contrarian financial play all the more intriguing.

Decoding the Form 8.3 Disclosure

The revelation of Sand Grove’s position came via a Form 8.3 filing, a mandatory disclosure under the UK’s Takeover Code. This regulation requires any person or entity with interests in 1% or more of a company's relevant securities involved in a takeover to disclose their positions and any dealings. The code is designed to promote transparency and ensure a fair and orderly market during the often-volatile period of a corporate acquisition.

Sand Grove's filing on November 25 detailed a total short position of 93,298 shares in Qualcomm, representing a minuscule 0.009% of the company. The activity included an outright sale of 35,671 common shares and, perhaps more tellingly, an increase of its short position through cash-settled derivatives (CFDs) by 17,144 reference securities. Both the sale and the derivative transaction were executed at a price of $163.5886 per unit.

While the position itself is not large enough to disrupt the multi-billion-dollar transaction, its public nature is what gives it weight. It transforms a private trading decision into a public market signal. For a specialized investment manager like Sand Grove, which operates in the complex world of event-driven and M&A-related strategies, such a move is rarely arbitrary. It represents a calculated thesis on the future value of the companies involved.

Arbitrage, Hedging, or a Contrarian Bet?

This single filing opens a window into several potential strategies, each with different implications for Qualcomm. One possibility is a classic merger arbitrage play, where a fund might go long on the target (Alphawave) and short the acquirer (Qualcomm) to profit from the deal's mechanics. However, with the acquisition price locked in and the deal's closure almost guaranteed, the opportunity for a simple arbitrage profit has significantly narrowed. This suggests a more nuanced strategy is likely at work.

Another explanation is that the short is a hedge, designed to balance other long positions in Sand Grove’s portfolio, perhaps within the semiconductor sector or broader technology landscape. This would frame the move as a risk-management tactic rather than a direct commentary on Qualcomm itself.

However, the most compelling interpretation, and the one most relevant to the bottom line, is that this represents a direct, albeit modest, bearish bet on Qualcomm's future. From this perspective, Sand Grove may believe that the market is underestimating the challenges ahead. Is Qualcomm overpaying with a deal that represents a 96% premium over Alphawave’s pre-announcement stock price? Will the integration of Alphawave's technology and teams prove more difficult and costly than anticipated? Or is the skepticism aimed at Qualcomm's ability to successfully wage war in the data center arena, a market with deeply entrenched incumbents and brutal competition?

This view gains some context when considering Qualcomm's recent strength. The company beat analyst expectations with its Q4 2025 earnings, posting revenue of $11.27 billion and an EPS of $3.00, and has issued strong guidance for the next quarter. Its stock has performed well, buoyed by optimism around its AI strategy. Sand Grove's position runs contrary to this prevailing positive sentiment, suggesting a belief that the current market price does not fully account for the execution risk inherent in Qualcomm's ambitious pivot. For a firm focused on innovation and the bottom line, the ultimate return on this massive investment is the only metric that matters, and Sand Grove may be betting that the path to profitability will be rockier than the market currently expects. The filing is a quiet but clear question mark placed next to Qualcomm's triumphant acquisition narrative.