Activist: Motorola Changes Not Enough

If you bought some Moto stock 10 years ago, you were getting in just as the StarTac was becoming the "must have" phone at the time. Attention-craving execs would lay it out on their lunch tables, eliciting compliments from others. Your Moto investment would have doubled in a couple of years.

Fashion designers know they have to change their lines every season, but Motorola's board and management team didn't. They failed to produce any popular successors, and Moto's shares lost 75% of their value from 2000 to 2003.

The board brought in Ed Zander in early 2004 to replace former CEO Chris Galvin. The ultra-slim Razr was just being released and it became the new StarTac. From the start of 2004 to October 2006, Moto's shares rose 60% -- triple the S&P's performance.

After three years of selling Razrs, with countless knock-offs, Motorola again hit the wall. Its stock is down 63% from 18 months ago. Despite its latest changes, Motorola needs to do much more.

Last July, worried that the company was going to sit back after beating back Icahn's bid for a board seat, I launched an activist campaign as an individual shareholder in Motorola. Using Web tools like blogging, YouTube videos, wikis and a "pledge your Moto shares" widget, I encouraged 130 other small investors to pledge a collective 600,000 Motorola shares (worth about $6 million today) in support of a "Plan B" of changes for the company to follow.

Unfortunately, the company failed to enact almost all of our "Plan B," except for replacing Zander.