Thursday, 12 April 2007

Icahn Raises Stake in Motorola

Carl Icahn, billionaire financier, wants to raise his stake in American telecom giant Motorola and enter the board. His interest comes at a time when Motorola wants to buyback shares. Motorola seems to be undergoing the dark ages, as the company is not faring too well post the launch...

Carl Icahn, billionaire financier, wants to raise his stake in American telecom giant Motorola and enter the board. His interest comes at a time when Motorola wants to buyback shares.

Motorola seems to be undergoing the dark ages, as the company is not faring too well post the launch of its blockbuster phone MotoRazr. The company has not come out with a good enough successor in terms of architecture after MotoRazr. The company has been loosing market share to bigger rival Nokia and Sony Ericsson and Korean giants Samsung and LG.

In the wake of falling profits the company’s chief financial officer is leaving. The company hired a chief operating officer, Greg Brown.

Icahn has raised his stake in Motorola to 2.7 per cent, from 2.48 per cent as of his previous filing on March 12. Icahn has been demanding board seats at other companies as well— WCI Communities and Temple-Inland for instance.

Icahn announced in January 2007 that he would get a board seat by asking Motorola to use his USD 11.3 billion cash pile to buy back more shares.

Motorola has not taken this too well. The company has requested its shareholders "not to sign any proxy card" sent by Icahn.

Motorola has lost around USD 22 billion, in the last five months. Chief Executive Ed Zander said 2007 profit and sales will not match expectations and predictions and that they have missed the mark altogether.

Motorola is planning to purchase back USD 2 billion worth of shares.