Why Icahn Made His Motorola Move
SCHAUMBURG, Illinois (TheStreet) -- Motorola (MOT) is in the spotlight after activist investor Carl Icahn snapped up an additional $86 million worth of the phonemaker's shares, underlining the compay's growth potential.
The purchase takes Icahn's stake in Motorola to 10.4%, according to The Wall Street Journal, and highlights the company's momentum in the fiercely competitive smartphone space. Icahn's move comes at a time when Motorola is undergoing a major metamorphosis designed to boost its smartphone sales.
Motorola is in the process of splitting into two companies -- one for networking equipment, the other for mobile phones and TV set-top boxes. Last month, the gearmaker also announced a deal to sell most of its wireless network infrastructure assets to Nokia Siemens Networks for $1.2 billion.
Despite intense competition, Motorola's phone business is already enjoying success. The company expects to sell 12 million to 14 million smartphones in 2010 and recently launched the Google (GOOG) Android-powered Droid 2 phone.Sold via Verizon (VZ), the Droid 2 offers twice the speed and memory of the original Droid phone and is already being cited as a major positive for Motorola and its investors. Motorola is also preparing to launch its Droid Pro phone later this year to challenge Apple's (AAPL) popular iPhone 4. Analyst firm NPD Group recently reported that Android had overtaken Research In Motion's (RIMM) BlackBerry OS as the most popular U.S. smartphone operating system, thanks partly to Motorola. Motorola shares crept up 2 cents, or 0.27%, to $7.52 in Friday trading, mirroring the modest advance in tech stocks that saw the Nasdaq gain 0.38%. --Written by James Rogers in New York. >To follow the writer on Twitter, go to http://twitter.com/jamesjrogers.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV