NEW YORK (TheStreet) -- Qualcomm (QCOM - Get Report)  stock is getting hammered, down 8.74% to $48.35 on Wednesday as South Korea's antitrust agency is accusing the chip maker for allegedly violating local competition law. 

South Korea's Fair Trade Commission sent an "examiner's report" to Qualcomm, alleging that the company does not properly negotiate aspects of its licences and that it improperly maintains both chip and intellectual property licenses, Barron's.com reports. 

Consequently, Qualcomm should be fined, regulators said. 

The chip giant refuted these claims stating, "The allegations and conclusions contained in the examiner's report are not supported by the facts and are a serious misapplication of law."

This action comes as Qualcomm has a significant market power in South Korea. The country is the home to smartphone giants Samsung Electronics (SSNLF), LG Electronics and Pantech, which are all of Qualcomm's clients, ZDnet.com reports.

Regarding these allegations, Bernstein Research analysts said "The Case Examiner's report sheds some troubling light on the details of the complaint," Barron's.com noted. 

San Diego-based Qualcomm develops, designs, manufactures, and markets digital communications products and services in China, South Korea, Taiwan, the U.S., and internationally.

Separately TheStreet Ratings team rates QUALCOMM INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

We rate QUALCOMM INC (QCOM) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its expanding profit margins, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The gross profit margin for QUALCOMM INC is rather high; currently it is at 64.70%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 19.46% is above that of the industry average.
  • Net operating cash flow has slightly increased to $1,684.00 million or 4.01% when compared to the same quarter last year. Despite an increase in cash flow, QUALCOMM INC's average is still marginally south of the industry average growth rate of 4.05%.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 25.20%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 39.63% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Communications Equipment industry. The net income has significantly decreased by 43.9% when compared to the same quarter one year ago, falling from $1,894.00 million to $1,062.00 million.
  • You can view the full analysis from the report here: QCOM