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Thread: Motorola Mobility Sued by Shareholder to Stop Sale to Google

  1. Editor in Chief
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    Motorola Mobility Sued by Shareholder to Stop Sale to Google


    Here is a story that could either be a tale of extreme corporate greed, or one of an individual investor protecting his investment. We will give you the facts and let you decide which it is. Recently, Google announced that it would be purchasing Motorola Mobility for the price of $12.5 Billion dollars. That figure comes to $40 dollars a share to current Motorola Mobility shareholders, which is an instant profit of 63% on their investment. However, this amount didn't go over very well with one investor, named John W. Keating.

    Mr. Keating, filed a complaint in a courthouse in Chicago against Motorola Mobility Holdings Inc. and its chief executive officer, Sanjay Jha, along with Google and nine members of Motorola Mobility’s board, claiming that they failed to get a better price. “The offered consideration does not compensate shareholders for the company’s intrinsic value and stand-alone alternatives going forward, nor does it compensate shareholders for the company’s value as a strategic asset for Google,” Keating claims. He further added, “Motorola has experienced an economic resurgence since separating into two separate companies. The Android smartphone technology it relies on continues to gain ground on Apple’s iPhone.” He indicated that shareholders will no longer be able to share in the future success of the company. Here's a quote from the Bloomberg article with the final details,
    Keating accused the individual board members of breaching their duty to investors and claims Motorola Mobility and Google aided and abetted that breach.

    He is seeking class-action, or group, status for the case, an order declaring the agreement is unenforceable and an order barring the completion of the sale.

    Jennifer Erickson, a Motorola Mobility spokeswoman, said the company hadn’t yet had an opportunity to review the complaint and that she and couldn’t comment on it. Google declined to comment, Katelin Todhunter-Gerberg, a company spokeswoman, said in an e-mail.
    What do you guys think? Does he have a legitimate concern, or should he have just been satisfied to "take the money and run?"

    Source: Android.net via Bloomberg/Businessweek.com
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    I'd Just shut my mouth and take the money. Its pretty sad you can sue people for anything these days.

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    the complaint is interesting and it highlights a problem with corporations--as long as the board of directors and executives make out ok in a deal, there is little incentive to do the right thing for anyone else including other shareholders, employees, partners, the public, the government, the environment, etc.
    Do you like uninstallable bloatware?
    It takes about 5 minutes to complain and it's kinda fun. Let's not be complacent!
    Contact Verizon (anonymous w/ fake name if you like)
    Chat/Email/Call Motorola (anonymous if you like)
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    I'd just take the money and run, or reinvest if i had a lot invested into Motorola.
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    The offer was almost double of what the shares were trading at prior, how is that not fair to the shareholders? Holding out for a higher price didn't work to well for Yahoo when Microsoft rolled in with a big offer. The grass is always greener...
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    #6
    Quote Originally Posted by bosshog85 View Post
    I'd Just shut my mouth and take the money. Its pretty sad you can sue people for anything these days.

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    I am going to sue this guy if he messes up the deal.
    EFGantry and ftajeffrey like this.
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    In this uncertain market, they need to take the money and run. There is way too much negative in the markets today. Europe's economy, Europe's banks (and what U.S. banks have invested in them), and our own economy are bringing markets down. Unemployment is still way too high. Foreclosures are going up. The Feds haven't announced anything about QE3 (Quantitative Easing). The market rebound has all been due to government spending and it's all ending.

    In this environment, mergers and acquisitions won't do well. To have a big pocket company such as Google make an offer for Motorola; with a 60% increase in share premium, the investors need to take the money and run. Without this offer, shares of Motorola Mobility will continue to decline with the markets.
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    Quote Originally Posted by steveninspokane View Post
    I am going to sue this guy if he messes up the deal.
    Great idea!!

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    Out of curiosity, was it not quoted in another thread that Moto was only worth roughly $12 billion? Given that they are not being kept afloat, at least in the phone market, what more does this person want? $50 a share?
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    #10
    Drama suit. But drama suits often get paid to go away. As long as extortion works, people are going to extort. Case in point: Al Sharpton.
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