Motorola Mobility, Motorola Solutions Each Rise Following Split |
| Wall Street Journal - Jan 4, 2011 |
Shares of Motorola Mobility Holdings Inc. (MMI) and Motorola Solutions Inc. (MSI) each rose as Motorola's long-awaited split into two entities officially took place Tuesday.
The split-up of Motorola, nearly three years in the making, marks the passing of an 82-year-old corporate icon and creates two more-focused companies. Motorola Mobility consists of its consumer-focused smartphone and set-top box business, while Motorola Solutions focuses on handheld communication devices and public-safety radios.
Still, there are concerns surrounding the split. Motorola Mobility is now a smaller player going up against bigger and more diversified rivals. It needs to find a way to make its Android-powered phones stand out and it will face increasing competition if, as expected, Apple Inc. (AAPL) lets Verizon Wireless market the iPhone.
Meanwhile, both entities may end up battling each other for corporate business, especially as companies look to replace their handheld communication devices with more powerful smartphones and tablets. Motorola Solutions could also be exposed to municipal budget pressures.
Motorola Mobility shares rose 8.1% to $32.70 recently, while shares of Motorola Solutions, which opened lower, were recently up 17 cents to $37.65. Both entities began trading on the New York Stock Exchange last month in the form of "when-issued" shares. "When-issued" trading helps investors determine the opening price for the new stocks before an official split.
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- Posted: 2011-01-04 10:11:45
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