Shareholder sues Motorola Mobility over Google sale

By on Aug 18, 2011 at 9:06 AM
Legal August 18, 2011

A Motorola Mobility shareholder has initiated a class-action lawsuit against the company after CEO Sanjay Jha announced intentions to sell the firm to Google for $12.5 billion. The shareholder hopes to block the sale and argues that Motorola Mobility failed to shop around for the best 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,” investor John W. Keating said in the lawsuit. “Motorola has experienced an economic resurgence since separating into two separate companies,” he added. “The Android smartphone technology it relies on continues to gain ground on Apple’s iPhone.” If the deal is approved, Motorola Mobility will pay its investors $40 per share in cash.

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  • Craig Cabrey

    A share price is supposed to maintain the overall value of a company. Therefore, a 63% premium on that valuation is more than a fair price. It’s borderline generous (and yes, I’m aware that large premiums are the norm when it comes to acquisitions).

    • Anonymous

      If Google transfer the Patents to Google HQ and run Moto as a subsidiary then it will struggle as it will basically be a cheap OEM with no IP just like the other other 35 or so nameless OEMs.
      As a shareholder I wouldn’t be happy with the companies most important asset being stripped away.
      At the moment Motorola can use it’s IP to slow it’s competitors or extract fee’s. This is what Moto should be doing cause on paper they suck at making a profit from selling handsets.

      • http://profiles.google.com/jayq330 Jonathan Oquendo

        i dont think google would  let that happen, they’ll most likely *as google said themselves* keep motorola running as there phone department,selling phones to motorola,sprint & at&t. they’re still going to make alot of money. they would use any patent as needed & definitely won’t weaken a new addition that cost 12.5 Billion…imagine that!

    • Lilylovehans

      Where was Mr. Keating when major Motorola stockholder Carl Icahn rallied
      the other stockholders towards the Google-Moto deal? Mr. Icahn stands
      to pocket about a billion dollars from the deal, and the others, too,
      will benefit immensely.  What’s Keating crying about? He’s probably a
      Samsung mole.
      I am a 26 years old nurse, young and beautiful. Now I am seeking an older gentle man who can give me real love , so i got a username Annababe2011 on—a’ge’l'es’s'da’te. C óM—it is the first and best club for y’ounger women and older men, or older women and younger men,to int’eract with each other. Maybe you wanna ch’eck it out or tell your friends.

  • Anonymous

    The sale price represented a 60% premium over the current trading price for a company that doesn’t turn a profit . Their market share is bieng taken over by bigger players, especially Samsung. He should consider himself lucky.

  • ParadingLunatic

    First off he mentions that “Motorola has experienced an economic resurgence since separating into two separate companies,” which is a load of crap  One month after the split the stock peaked, and has been slowly dropping since.  Also the fact that he mentions that Android continues to gain ground on Apples iPhone has little to nothing to do with Motorola itself, at least not until the purchase of Google and Motorola takes place.

  • Anonymous

    Mr Keating should sue over the botched launch of that damn XOOM; which still hasn’t seen a GSM version state-side or, WORSE yet, no MicroSD functionality and support. That is the True Story™ on what should be the full scope of his lawsuit.

    At this point, I’m completely dismissing the XOOM and anxiously awaiting to get me some of that HTC Pussynni™

    True Story™®©

    • Anonymous

      Hope you enjoy your HTC Pussy. You sound pretty desperate for some.

  • Anonymous

    The company has always lost money. It lost more last quarter then the previous quarter. It wa over-valued to begin with. How is a 63% premium over-valued.

  • http://profiles.google.com/steve.garon Steve Garon

    Dumbass sues Motorola after his shares doubled… And that’s the world we live in!

    • http://twitter.com/TorySymonds Tory Symonds

      Your comment was spot on Brilliant

  • AJ58

    This is nothing but bluster.  I work in public D&O insurance, and I’d say 80-90% of the time when a company gets acquired, shareholders of the acquired company file suit claiming that the company didn’t get a good enough price.  In 90+% of those cases, the suits are simply settled for “additional disclosures,” which basically means the acquired company lets the suing shareholders in (a little bit) on the process & rationale behind the deal.

    A 63% premium (especially in this market) is an overpay, not an unfair price.  Seriously, is there a Motorola shareholder on Earth that thinks that their stock would pop more than 63% in the foreseeable future?  Of course not.  This suit will be settled and dismissed within weeks.

  • Anonymous

    named parties on lawsuits get a big cut of any settlement. this dude obviously knew that and saw an opportunity to cash in (seeing as how the stated terms indicate google’s/moto’s eagerness to push this through). more reason we need to force court fees on “losing” parties. it would dry up suits like this very quickly. 

  • Anonymous

    The have slipped from being the number 1 mobile OEM in the world to number 3 over the last 2 years.  Marketshare dropped from ~25% to under 15%.   Even RIM is doing better.

  • Michale11111

    This guy is nuts. The premium of the market valuation is huge. More than 40% I believe. Another lawyer manufactured lawsuit in an attempt to extort money.

  • Anonymous

    “The Android smartphone technology it relies on continues to gain ground on Apple’s iPhone.” 
    No thanks to Motorola, whose phones have been losing share for over a year, and who offered that idiot box of a tablet. 

  • Lawrence of Arabia

    It would be nice if he blocked the take over and the share goes back to $20. lol

  • Anonymous

    I just got an iPhone4 for $ 23. 53 and my girlfriend loves her Dell laptop that we got for $ 33.49 there arriving tomorrow by UPS I will never pay such expensive retail prices in stores again. Especially when I also sold a 42 inch LED TV to my boss for $ 645 which only cost me $ 59.63 to buy.We are getting all this stuff from, GrabPennу.com

  • Ulysses Grant

    ….the world we live in

    What the heck is going on??? Can’t we just get along???

  • TooMuchNoise

    I would imagine that this is the equivalent of being forced to sell your house a market value + a small premium after the housing market crash. Many would rather wait it out if they are not strapped for cash.

  • Anonymous

    Shop around???  This guy’s mental…  Did he see the numbers?  Maybe he thought it was $12MM instead of BILLIONS?

  • Wirelessmodz

    freaking moron thats what he is

  • Anonymous

    Lol! This guy’s crazy or on something! Motorola is barely worth $2B! They got over $10B for their patents, that can’t protect them from lawsuits. He should be happy.

  • http://twitter.com/snookasnoo Idon’t Know

    What?  Google got rolled by Motorola which is pretty pathetic.

  • Anonymous

    The only possible explanation is that this guy is a double-agent. Google by now has realized what an incredibly bad move this was and is now trying to figure out how to weasel out of the deal without forking over that $2,500,000,000 penalty. They’ll say something like “Sorry Moto, we’d love to do the deal, and as soon as you get things straightened out with your shareholders we’d be more than happy to sit down and renegotiate.”

    And then get out of Dodge.

  • Michael Sorg

    The stock was trading at 25 a share, now its trading at 38 a share, I’m fairly confused what his problem it. Maybe he is mad he didn’t buy more stock when it was cheap, either way he made money. 

  • http://www.facebook.com/allan.ramano Allan Ramano

    Where was Mr. Keating when major Motorola stockholder Carl Icahn rallied the other stockholders towards the Google-Moto deal? Mr. Icahn stands to pocket about a billion dollars from the deal, and the others, too, will benefit immensely.  What’s Keating crying about? He’s probably a Samsung mole.

  • http://twitter.com/DGEck Dan Eckert

    This artical seems to be missing some of the big points that were being talked about yesterday when it was being made it out like Google only paid for the patents ($510,204.08 per) and got a mobile phone business for free! 
     
    “Motorola has a portfolio of 24,500 patents and patent applications that instantly bolsters Google’s strength in the IP war. Looking at some recent patent auctions and using some simple math can show why these patents were indeed the target of Google’s acquisition.Using one of the industries recent patent auctions as a baseline, in December of 2010, Novell sold off its portfolio of 882 patents for $450 Million. A simple division calculation leads us to a value of $510,204.08 per patent. Why not round that figure off you ask?Well, let’s look at the patent value of the Motorola acquisition.Forgetting that Motorola also makes mobile phones, let’s say the entire value of the acquisition was in their 24,500 patents and applications. At a $12.5 billion price tag, that equates to…drum roll please…$510,204.08 per patent. Can anyone guess what heuristic they used in the board room in valuing the deal?In the Motorola acquisition, Google bought a patent portfolio and got a mobile phone business thrown in for free.”

  • http://twitter.com/#!/PitoVH787 Pito V.H

    $12.5 is low ass hell …

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