Motorola Gains After Setting Jan. 4 Date for Split
Stock Chart for Motorola Solutions Inc (MOT)
Motorola Inc., the U.S. maker of mobile phones and two-way radios that plans to split in two, climbed the most in more than two months after saying it will complete the move on Jan. 4 and issue new shares.
Motorola investors will get one share of Motorola Mobility Holdings Inc., the new company built around the handset unit, for every eight shares they now own, the company said yesterday. Immediately afterward, it will swap seven old shares of Motorola for one new share in the remaining company, boosting the stock’s value by a proportional amount to lift its marketability.
The phone and television set-top box businesses that make up Motorola Mobility will remain under co-Chief Executive Officer Sanjay Jha. Co-CEO Greg Brown will run Motorola Solutions, which will house the company’s remaining businesses including bar-code scanners, walkie-talkies and other emergency- communication equipment.
Motorola, based in Schaumburg, Illinois, rose 35 cents, or 4.5 percent, to $8.01 at 4 p.m. in New York Stock Exchange composite trading, the most since Sept. 13. The shares have climbed 3.2 percent this year. Motorola Solutions will trade under the ticker symbol MSI starting Jan. 4, and Motorola Mobility will use the symbol MMI.
Motorola Mobility expects to post a loss at its mobile- devices unit in the first quarter, though it will be “significantly improved” from a year earlier, Jha said today at a technology conference in Scottsdale, Arizona. He said he expects the company to be in a “very narrow range around break- even” in the first quarter as performance at its set-top box business improves.
There are no changes to its fourth-quarter forecast and a target of 12 million to 14 million phone shipments for the period still ‘feels right,” he said.
Motorola Mobility plans to introduce tablet devices with 7- inch and 10-inch screens as both formats are “quite meaningful,” Jha said. Apple CEO Steve Jobs said in October that devices like Research In Motion Ltd.’s planned 7-inch BlackBerry PlayBook are “dead on arrival” because they are too small to compete with the iPad, which has a 9.7-inch screen.
Jha didn’t elaborate today on when Motorola’s own tablet is likely to come out. He said in an October interview that he’s “very happy with the progress” the company is making in building its own device, and it’s planning to release a tablet early next year.
“The tablet represents a growth opportunity for us but not for every company,” Jha said. “Software differentiation is going to be very important.”
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