Motorola Inc. may have blocked Carl Icahn from winning a seat on its board,
but that could be the least of its worries.
In a post on
SeekingAlpha,
George Gutowski argues that the company needs to do something big to regain
the faith of investors alarmed by Motorola's plummeting cell-phone sales. His
solution? Buying Nortel Networks Inc.
"They need more than just another good product," says Gutowski, author of
Financial
Skeptic. "They need to make the market believe they have momentum. But
right now, no one really believes that. So watch for some mergers and
acquisitions."
Nortel has been a rumored acquisition target for several years, and at this
point reports that another large company might be interested don't carry
the punch they once did. On the other hand, Motorola and Nortel are two of the
few telecom equipment makers that have not yet teamed up with a
major rival. As Gutowski says, spiffy new phone models alone may not be
sufficient to revive Motorola. As a deal target, Nortel also is more
attractive than it has been in a long time. The company has at long last put
its internal accounting scandal behind it and is slowly starting to show
improved performance. The company's first-quarter revenues rose 3%, even after
accounting for the sale late last year of its universal mobile
telecommunications system business to Alcatel Lucent.
—Andrea Orr
See
post from SeekingAlpha
See
story from TheDeal.com
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