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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
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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.

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 replacing Ed Zander who will step down on Jan. 1. Brown is believed to be more amenable to breaking up...
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)
A Motorola RAZR cell phone is seen at a consumer electronics store in Gloucester, Mass. in this Friday, Jan. 19, 2007 file photo. (AP Photo/Lisa Poole, file)
A Motorola RAZR cell phone is seen at a consumer electronics store in Gloucester, Mass. in this Friday, Jan. 19, 2007 file photo. (AP Photo/Lisa Poole, file)   (Associated Press)
Private equity investor Carl Icahn speaks at the World Business Forum in this Oct. 11, 2007, file photo in New York. Icahn is the top proponent of a Motorola breakup. (AP Photo/Mark Lennihan, file)
Private equity investor Carl Icahn speaks at the World Business Forum in this Oct. 11, 2007, file photo in New York. Icahn is the top proponent of a Motorola breakup. (AP Photo/Mark Lennihan, file)   (Associated Press)
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Razr • Carl Icahn • telecom industry • Motorola • Greg Brown • telecommunications companies

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