Stock Market News: Motorola Inc (MOT) Gains on Split Announcement
For quite some time now, Motorola Inc (MOT) has been losing market share in the handset game. Motorola cell phones and accessories have been floundering, bringing the rest of the company down. This morning, however, Motorola has found a way to stem the losses. Reuters reports on the latest decision by Motorola:
Motorola Inc said on Wednesday it would split into two publicly traded entities to separate its loss-making handset division from its other businesses, sending its shares up more than 10 percent.
This is a smart move for Motorola Inc, which has been seeing profits from its other business interests, which include public safety, network equipment and enterprise. By changing the structure of the company, Motorola will be offering different focuses, and diversifying the opportunities for investment in the company.
MOT saw a little jump on the news, as investors signaled approval of the move, which is set to be completed next year. Shareholders of MOT will be offered a tax-free distribution as the changes take place. This is probably another bonus for many investors.
The deal isn’t assured, however. There is still a rather ugly proxy battle going on right now with Carl Icahn. He is suing Motorola, demanding documents related to the mobile devices division of Motoroal. Additionally, more tax and legal analysis needs to happen before the split can be finalized.
MOT offers an interesting opportunity for you investment portfolio. If you believe that company offers solid value and that its management practices will eventually lead it through the hurdles, then it might be a good, cheap addition to your investment portfolio. On the other hand, if you have misgivings about the way this will all play out, it might be better to stay away.
Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional.
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