Motorola Working Out the Split - Very Slowly - Too Slowly?

moto-split-up Motorola is getting closer to understanding how to split itself in to two.  They are now planning to split the company sometime next year in an attempt to avoid a fire sale on the cell phone portion of the company.

That will leave a company with a massive library of patents and a current line of profitable business in set top boxes and high end two way radio systems.

not the 2 way radios you used to see in Wal-Mart, that business died after being mis-managed by one of Motorola's unscrupulous Chinese partners and will probably have the plug completely pulled within the next 2-8 months

The new companies will potentially see a stock split as follows (loosely based on today's stock price.

Motorola's handset business will probably have a value of $1.69 a share next year, while the other divisions could be worth $7.49, Merrill Lynch & Co. analyst Tal Liani in New York said today in a note to clients. Brown wouldn't comment on the potential market value of the phone unit. Bloomberg.com: Worldwide

On the down side, this transition appears to be fast tracked to a very slow transition.  That means that losses will likely continue to grow while the best and brightest talent left in the cellular operation will jump ship and head for other companies or try and seek a life line in the still profitable section of Motorola.  That's bad news for both businesses as the value of the cell phone unit will be worth even less (missing talent and knowledge) and the currently profitable portion of Motorola will become bloated more people than it needs.

Despite Carl Icahn's attempts to get more information about Motorola's plans to get out from under its own self devised problems, Icahn seems to be failing himself.  Maybe he's catching a little bit of the virus that seems to have plagued Motorola over its long and troubled history of inventing industries and then shooting itself in the foot and bleeding itself out of the industry (Car Radios, Stereos, Televisions, Pagers, Semi Conductors and processors, 2-Way Radios (walkie - talkies) and now Cell Phones.

The real problem here is two fold.  Motorola is a company that suffers massively from group think stodgy bloat, and they are joined at the hip to business in China.  They did deal after deal with the Government of China and Chinese companies and they have rapidly lost control over their business, operations, and intellectual property since.  A happy marriage and example of United States business reaching out to invest in China has been flipped completely around.  Motorola may have gone to the wedding wearing bridal lingerie, but their Chinese Partners have acted more like a pimp and less like a husband turning Motorola out on the street (literally knock offs and worse.)

In the meantime, Motorola is heading from the position of number 3 in mobile phone sales to number 4 or 5.

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