Motorola (MOT) breaks itself into more pieces


Motorola (NYSE: MOT) has already decided to spin-off its largest and least successful unit, its handset business. The company's stock is near a 52-week low, trading at $7.25, making the firm's market cap less than $16.5 billion. Some analysts wonder if the handset business has any inherent value at all. It is losing hundreds of millions of dollars a quarter and its revenue is in a sharp decline.

Getting rid of one division may not be enough for the company. It may be preparing to auction off more of its businesses. According to The Wall Street Journal, the electronics company "is reorganizing its second-largest business unit, home and networks mobility, into three distinct businesses." One unit will focus on set-top boxes, another on traditional cellular infrastructure, and a third on new technologies including WiMax.

The move assumes a certain stupidity on the part of Wall Street -- particularly the analysts who cover the company. Setting up the discrete units probably does not make them easier to sell. In Motorola's future financial statements, it may make the performance of each business more easy to see, but the pros can already figure that out.

The more simple message from the move is that Motorola now appears determined to try to improve its share price by selling as much of the company as it can.

It is a deeply pessimistic move. It assumes that current management cannot get a good yield from the assets that will be left after the handset business is gone. It represents a surrender rather than a fight to make its remaining businesses better.

Douglas A. McIntyre is an editor at 247wallst.com.

Reader Comments (Page 1 of 1)

Symbol Lookup
IndexesChangePrice
DJIA+52.3015,387.58
NASDAQ+5.693,502.12
S&P 500+2.871,669.16

Last updated: May 22, 2013: 02:44 AM

Hot Stocks

General Electric

23.66+0.09(+0.38)

Alcoa

8.760.00(0.00)

Apple Inc

439.66-3.27(-0.74)

Google Inc 'A'

906.97-1.56(-0.17)

Bank of America

13.44-0.07(-0.52)

Wal-Mart Stores

77.39-0.01(-0.01)

Exxon Mobil Corp

92.80+0.28(+0.30)

Ford

14.95-0.10(-0.66)

Citigroup

51.66+0.06(+0.12)

IBM

208.65+1.05(+0.51)

Yahoo

27.00+0.42(+1.58)

Starbucks

64.25+0.42(+0.66)

Microsoft

34.85-0.23(-0.66)

Home Depot

78.71+1.95(+2.54)

DailyFinance Headlines

Benzinga Headlines

TheFlyOnTheWall.com Headlines

    BioHealth Investor Headlines

    WalletPop Headlines

    DailyFinance BlackBerry App

    My Portfolios

    Track your stocks here!

    Find out why more people track their portfolios on AOL Money & Finance then anywhere else.

    BloggingStocks Partners

    More from AOL Money & Finance

    BioHealth Investor Headlines

    Page Loaded in 1369205084976 ms.