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Motorola is splitting into two companies, creating a "broadband & mobility solutions" company, which includes wireless infrastructure, cable TV boxes and walkie-talkies, and a mobile devices company, which is cell phones.
The split will probably happen in 2009, and it's not really a huge surprise--the company has been talking about doing this for months. It's been a rough couple of years at the Schaumburg-based company. Motorola laid off 7,500 employees last year, the CEO resigned, and "billionaire investor" Carl Icahn is shaking things up, too. From Crain's:
A flock of executives have left the company this year, and more cuts and changes are likely as the new management team scrambles to retain control in the face of a revived threat from Icahn.Icahn, who has been steadily increasing his Motorola position, disclosed in a filing this month that he now owns 142,362,000 shares, or 6.3 percent — up from 5 percent a month ago.
Wednesday's announcement came two days after Icahn sued Motorola, seeking documents about its executives and its cell phone business.
Motorola was flying high after the RAZR phones became popular but hasn't had a hit since. [AP, Trib, Crain's, Motorola release]
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I found myself told frustratingly little about the rationale behind Icahn's suit, but what I'm getting, based on the little information I have, is the spectacle of a belligerent man with a 6% share of the stock getting to dictate policy to those holding the other 94% of the stock, because of his willingness to stick with a nuisance suit to the absolute, bitter, profit destroying end.
Wondering if maybe the "free" market might be something of a myth.