Editor in Chief
- Dec 30, 2010
- Reaction score
- Austin, TX
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?"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.
Source: Android.net via Bloomberg/Businessweek.com