NEW YORK (TheStreet) -- Facebook's planned initial public offering is the talk of the business media these days.
Everyone is swooning over how big it will be, how many millionaires it will create and how Facebook might continue to grow after its IPO.
Read the full post on TheStreet
NEW YORK (TheStreet) -- Late Friday, after the market closed, Motorola Mobility(MMI_)sent out an innocuous-sounding press release with a "Business Update" in the title.
The release ended up tanking Google's(GOOG_)stock by more than 4% on Monday and the sell-off continued on Tuesday, even after the market bounced out of the gates.
Read the full post on TheStreet
There was an interesting article by Forbes' Eric Savitz on Tuesday night, covering a Macquarie USA report that speculated Microsoft (MSFT) might take a run at Motorola Mobility (MMI) and claim it from Google's (GOOG) grip. How can this be? Macquarie analyst Kevin Smithen points out that Motorola has $3.5 billion in cash and $1.7 billion in net operating loss carry forwards. Once you assume that Google is going to spin off the home business to private equity, you're probably looking at only a $5.3 billion price tag for the patents and handset business. Why couldn't Microsoft also spin-off the handset business? Well, it has more than $50 billion in cash and the ability to draw down its debt facilities. As such, it's clear the company certainly could pay an even bigger number for Motorola if it wanted to do so. Why would Microsoft do this? To knee-cap a bitter enemy -- that's why. The firm could go after Google's remaining handset makers, such as HTC and Samsung, with the patents that Motorola was about to wield against them. Microsoft could convince them -- Redmond-style -- that the Windows 7 phone operating system was actually much better than the latest Android iteration. So how much would Microsoft have to pay? It wouldn’t be much more, in all likelihood. Google is really now at the maximum of what its board can credibly approve. The $12.5 billion represents almost one-third of their cash on hand, although it’s less when you back out the various components described above. Motorola's stock could give a boost to any merger-arbitrage hedge funds playing for an increased bid. On the other hand, shares of Microsoft and Google might take a short-term hit if a bidding war breaks out. This could get interesting.
Google's (GOOG) purchase of Motorola Mobility (MMI) is all about arming itself for an increasingly heated patent war with the likes of Apple (AAPL), Microsoft (MSFT), Oracle(ORCL), Hewlett-Packard (HPQ) and Research In Motion (RIMM). Google is effectively paying $9.5 billion (net of Moto's cash) for Motorola's patents. It gets 17,000 now and 7,500 in the queue that are still awaiting approval. Suddenly, the Nortel patent haul for over $4 billion seems like chump change. If I were Larry Page, I would have pulled the trigger on this deal for the patents alone at this price. But what he does with Motorola from here will tell the tale on whether this deal makes sense in the long run. My view is that it will be an albatross if Google really tries to keep it as a separate unit and make a go of it as a hardware vendor. I just don't see how it can succeed at that. Google would anger its partners, and it would have to rely on mediocre Motorola management to make it a success. Or it will jump into something with both feet that it has no experience in (running a low-margin manufacturing business). It's a recipe for stepping in it. Google might plan to close this business down after it gets governmental approval for the deal. It might be keeping up appearances of continuing to run this business when it has no interest in doing this. I have no position in Google, but I would suggest that any Google longs be concerned if they see evidence that Google does seriously want to continue as a hardware maker and out-Apple Apple.Stock quotes in this article: GOOG MMI AAPL MSFT ORCL RIMM HP
By Eric Jackson
Carl Icahn no longer manages outside investors' money. This prompted his former right-hand man, Keith Meister, to leave last December to start a new hedge fund. So why is Meister still serving on the Motorola Mobility board as Icahn's representative?
Read my full post at Forbes.
