As Razr Loses Edge, Motorola Could Cut Itself

Top investor wants the struggling company to break up
By Kevin Spak,  Newser Staff
Posted Dec 13, 2007 8:37 AM CST
An undated photo provided by Schaumburg, Ill.-based Motorola Inc. shows President and Chief Operating Officer Greg Brown. Motorola announced Friday, Nov. 30, 2007, that Brown will become chief executive...   (Associated Press)
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(Newser) – In an era of rampant telecom convergence, Motorola may be headed the other way. With its once-popular Razr phone leading a money-losing cellphone business, Carl Icahn, the company’s No. 3 shareholder, thinks slicing up the company would create $20 billion in shareholder wealth. The math works, the Wall Street Journal says, but a breakup would also highlight problems in each division.

Motorola has two non-cellphone divisions, which together are worth about as much as the company is trading at as a whole. “If the handset business was spun off, it is obviously worth a great deal more than zero,” Icahn reasons. Incoming CEO Greg Brown looks like a dealmaker, and speculation about a split may lift the stock on its own.