Forbes: Zeroing In on Zander

From Forbes:

Eric Jackson has already helped to topple one CEO this year. Traders seemed to be betting Wednesday that the activist investor will be able to do the same at Motorola.

Motorola (nyse: MOT - news - people ) shares climbed 3% at one point Wednesday on rumors that the much-maligned Ed Zander was stepping down as CEO due to pressure from Jackson.
The company’s shares ended the session up 33 cents, or 1.9%, to $17.95.

Jefferies & Co. analyst Bill Choi said traders told him the movement was due to rumors that Zander would resign.

Motorola's warning after the close that it would post a second-quarter loss on weak cell phone sales should raise the pressure on the embattled CEO. The Schaumburg, Ill.-based company said it expected a net loss of 2 cents to 4 cents a share from continuing operations. The Street had expected it to post a profit of 2 cents a share. It also lowered its sales projections from $9.4 billion to $8.6 billion to $8.7 billion.

On Monday, Jackson posted a YouTube video message on his blog “Breakout Performance” to his fellow Motorola shareholders with a five-point plan on turning the company around. Replacing Zander was at the top of his list.

Choi said the video was gaining support among shareholders, although he did not know who they were.

Zander has become the target of shareholder discontent at the handset maker, which has been unable to follow up on the success of its Razr phone. The company's price to earnings ratio has dropped during Zander's tenure, and its shares have underperformed against the S&P 500 and competitor Nokia (nyse: NOK - news - people ).

Unlike raiders like Nelson Peltz, who have made headlines by using their wealth to buy large interests in a company and then shaking its boardroom and agitating management, Jackson owns only 130 shares of the company’s stock. But using the power of the Internet he has made his influence known, most notably at Yahoo (nasdaq: YHOO - news - people ). Via a blog and a wiki, he led an investor revolt that contributed to the ouster of CEO Terry Semel last month.

Jackson's campaign is the second activist investor to cause headaches for Zander this year. Carl Icahn waged an aggressive, ultimately unsuccessful campaign to win a seat on the embattled company’s board. He took out a full-page advertisement in the Wall Street Journal in which he derided management for stumbling “badly” and singled out Zander for an alleged lack of leadership and reckless tongue wagging (See: "Carl Icahn Lashes Out Against Motorola Board" and "No Carl. Now What?").

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