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Motorola Mobility Sued by Shareholder to Stop Sale to Google

Discussion in 'Android News' started by dgstorm, Aug 18, 2011.

  1. dgstorm
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    dgstorm Editor in Chief Staff Member Premium Member

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    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,
    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
  2. bosshog85
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    bosshog85 New Member

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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.

    Sent from my SCH-I400 using DroidForums
  3. NoBloatware
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    NoBloatware New Member

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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.
  4. barski
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    barski New Member

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    I'd just take the money and run, or reinvest if i had a lot invested into Motorola.
  5. danDroid
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    danDroid Administrator Staff Member

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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...
    1 person likes this.
  6. steveninspokane
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    steveninspokane New Member

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    I am going to sue this guy if he messes up the deal.
    2 people like this.
  7. HamDog
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    HamDog New Member

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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.
  8. ccgustavus
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    ccgustavus New Member

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    Great idea!!

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  9. Tillmorn
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    Tillmorn Member

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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?
  10. Immolate
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    Immolate New Member

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    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.
  11. cush2push
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    cush2push Premium Member Premium Member Developer

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    he does bring up good points but they are invalid yes moto had a resurgence but now are on a downward spiral back to oblivion imo they are following the same path as the razr line of phones google stepped in to stop that
  12. kevsgroove
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    kevsgroove Member

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    Wonder if this John Keating is related to Charles W. Keating, whoop was chairman of the boars at Lincoln Savings and Loan. Mr. Keating and Lincoln were are the center of the Savings and Loan crisis in the late 80's early 90's. Took investors and the government for somewhere in the $3 billion range.
  13. wmfb
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    wmfb New Member

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    He must have an interest in the Law Firm!!!

    the only one that will win will be the lawyers...Motorola loses the sale, Google loses 2.5 because the sale doesn't happen, Motorola stock takes a dump, and Mr. Keating needs to find another hobby instead of instigating law suits! Our Country is feeding the legal system with shovels....look at the money being spent on criminal trials, civil suits, Bernie Madoff's, The government just keeps paying!!! I think it would give Google a great opportunity to really advance the Android system,
  14. kevsgroove
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    kevsgroove Member

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    Forgot to add ......................... and homeowners.
  15. GBH2
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    GBH2 New Member

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    I wonder how much Microsoft, Apple and/or RIM are paying this dude to file the lawsuit.
  16. kptphalkon
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    kptphalkon New Member

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    i wonder if this guy looked at the prospective of what motorola mobility would become under googles control. I personally would just take the 63% increase and reinvest it towards whatever google turns Motorola Mobility into, and pocket the rest.
  17. bosshog85
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    bosshog85 New Member

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    The Guy is just greedy and trying to get more money.

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  18. NoBloatware
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    NoBloatware New Member

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    It seems like most people here are totally against the lawsuit. I own some stock in Motorola and I'm not unhappy about the deal. HOWEVER, does anyone here have all the facts? Maybe this lawsuit is legitimate. Maybe the deal is too low and it isn't fair to shareholders. It wouldn't be the first time.

    I totally disagree with the argument that "you should be happy you got that 60% increase in such a volatile market. Don't be greedy." #1, I don't care what kind of market it is, I want a good deal when it comes time to sell any stock I own. #2, I am greedy! What the heck is the point of investing if not to make as much money as possible? If you're investing and you're happy with selling for an unfair amount and you're not interested in getting the most then you're doing it wrong.
  19. djrajir
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    djrajir New Member

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    I think you are missing the point though, first and most importantly in its current state Motorola Mobility is only worth maybe 13 billion at most, and no one would ever pay the face value for something in the corporate world; however Google's offer 12.5 billion is coming very close to paying the actual value, which shows they really do care about increasing their patent portfolio.

    Some other things to consider 63% increase in share value is HUGE for a company who has been seeing shave values drop. I can understand wanting to be greedy but investing in companies is, in some ways, like playing poker you have to know when to go all in and when to fold, but more importantly you have to know when to walk away from the table. Also keep in mind you, as a share holder, should see the values of your stock go up some before the end of september due to this announcement and the release of the Droid Bionic, at that time it might be wise to sell your shares. Just with the announcement from Google the share have jumped nearly 57% however this wont last and as the deal approaches share values will decrease drastically.
  20. NoBloatware
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    NoBloatware New Member

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    I'm missing the point, huh? How exactly do you come up with the value of 13 billion for Motorola mobility? You seem very confident that this deal is good and my point is that I don't know if the deal is good. Please explain how you know. Also explain how I'm missing the point while you're at it.

    Secondly, as I said it doesn't matter if the stock goes up 63% or 600%. What matters is whether it's a fair price. Furthermore, the point is that I may not agree that this is the time to sell my shares. Motorola and Google are deciding for me. That is the point: it may not be a good time to sell; it may not be a good deal.

    Never mind, with this statement I can see that you don't know what you're talking about. As the deal approaches, Motorola's share price will go up until they reach the target price.
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