Qualcomm is sinking after Trump blocked its $117 billion takeover by Broadcom citing national security

Reuters

Republican presidential candidate Donald Trump speaks on the USS Iowa in San Pedro, Los Angeles, California, United States September 15, 2015.

• President Trump issued an executive order Monday blocking Broadcom's takeover bid for Qualcomm, citing national security.
• Shares of Qualcomm sank on the news; while Broadcom rose slightly.
• It is a highly unusual move by a President.

Shares of Qualcomm sank more than 5% in early trading Tuesday after President Donald Trump blocked Broadcom's proposed buyout of the chipmaker in an executive order late Monday, citing national security.

The highly unusual order effectively squelches what could have been one of the largest technology acquisitions of all time. Trump said there was "credible evidence" that Broadcom "might take action that threatens to impair the national security of the United States."

Broadcom, based in Singapore but traded on the Nasdaq exchange, was up about 0.8% early Tuesday as Wall Street worked out the full ramifications of the White House's action.

"While Broadcom could look to challenge this move in theory, the Trump edict essentially kills any chances of this deal happening," wrote GBH Insights analyst Dan Ives in a note to clients on Monday.

Shares of San Diego-based Qualcomm are down 8% so far in 2018, while shares of Broadcom are down about 1.6%.

Intel, which competes directly with both Qualcomm and Broadcom, was up 2.1% at the time of writing. The merger would've created a very large competitor for the US chipmaker.

You can read more about the full context of the proposed merger here>>

Get the latest Intel stock price here.