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Motorola (NYSE: MOT) is getting close to picking a CEO for its handset division. The operation is going to be spun-out next year. Its worldwide share of the cell phone business has fallen from 22% to about 10% over the last two years.
The CEO search may be one of those odd situations where a chimpanzee may be as good as a man.
According to The Wall Street Journal, "Chief Executive Greg Brown is desperate to find a manager to turn around Motorola's mobile-devices division, which has lost $1.6 billion since January 2007, when its hit Razr phone ran out of steam." But, can new management do what two previous generations of managers at Motorola could not do? The company has been effectively flanked by the world's largest handset company, Nokia (NYSE: NOK), along with Samsung and Sony Ericsson. Getting back any market share may be hard for Motorola.
The spin-off also raises the issue of how the new unit will find capital. It will need at least $2 billion to $3 billion in cash. For a failing company, that may be hard to come by.
Motorola now trades at $9. Its enterprise and home electronics divisions could be worth as much as its $20 billion market cap. That leaves the handset unit with a value of zero.
Douglas A. McIntyre is an editor at 247wallst.com and the author of the Ten Stocks Under $10 newsletter.
Reader Comments (Page 1 of 1)
6-04-2008 @ 11:36AM
RoudMan said...
MOT board and CEO should be ashamed of the job they've done for us common share holders. I hope maybe in their private lives something will go wrong and make them realize how they've done us. What goes around should come around for them don't you think? I wish.
RoudMan