Motorola shares up after date set for company split
Telecommunications device manufacturer to become two separate companies on Jan. 4
Shares of Motorola (NYSE: MOT) rose more than 7 percent in early trading Wednesday after the hardware manufacturer set a date for early next year to split into two separate companies.
By mid-afternoon, Motorola was trading at 8.08, up 42 cents, or 5.5 percent, from Tuesday's closing price of 7.66. Shares reached as high as 8.20 earlier Wednesday. The company set a 52-week high of 8.74 on Sept. 24.
Motorola announced late Tuesday that it would split into two companies on Jan. 4. The handset division, currently enjoying a boost from Motorola's lineup of Android-powered devices, will be called Motorola Mobility Holdings and will trade on the New York Stock Exchange under the ticker symbol MMI. The rest of the company (the business mobile and network divisions) will become Motorola Solutions and will trade on the NYSE as MSI.
Motorola's board of directors on Tuesday also approved a 1-for-7 reverse stock split, to be enacted before the Jan. 4 trading session begins. That split will be for the MSI shares. New stock will be issued for MMI.
The company's board approved the split more than two years ago, but internal problems and the economic downturn delayed the move, which was expected sometime in 2009.
Motorola had been losing smartphone market share until this year, when it made a big commitment to Google's Android mobile operating system. However, it went from 4.3 percent market share in this year's first quarter to 4.5 percent in Q2, when it shipped 2.7 million smartphones. Still way behind Nokia, RIM, Apple and HTC, but a (modest) move in the right direction.
In October, the company reported Q3 net income of $109 million, up from $12 million in last year's third quarter.
Disclosure: After two years of owning a BlackBerry, this week I bought a Motorola Android 2. Still too early to tell how much I like it, but know this: I have no brand loyalty when it comes to electronics, computers, etc. None. Though I admit to having a strong preference for Fender guitars. Is that so wrong?
Chris Nerney writes about the business side of technology market strategies and trends, legal issues, leadership changes, mergers, venture capital, IPOs and technology stocks. Follow him on Twitter @ChrisNerney.