May 1, 2012
, the individual investor's no-nonsense resource for global business trends and investment ideas, has published a news story analyzing the investor outlook for Google's (Nasdaq: GOOG)
purchase of Motorola Mobility (NYSE: MMI).
After Google announced the deal to buy Motorola Mobility last summer, its stock price suffered because of fears the large acquisition would squeeze profit margins. Since then, Google shares have rebounded, reflecting apparent optimism that the deal would not permanently change Google.
However, Investor Uprising Editor in Chief
R. Scott Raynovich
points out that the deal could be transformative in nature,
turning Google into a lower-margin hardware company with many execution risks
"A closer look reveals that Google shares may not actually reflect the most negative scenario," writes Raynovich in his IU blog.
Analysts and investors still appear worried that the sizable transaction could drag down Google's margins and cause the company to deviate from its core software focus, though shares may not actually reflect these risks. Although the deal has received regulatory approval from the federal government, several other regulatory decisions are still pending. The deal is expected to close in the next few months.
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R. Scott Raynovich
Editor in Chief, Investor Uprising(406) 582-5886 direct(406) 223-2884 mobile
Community Editor, Investor Uprising(201) 360-6773