Motorola (MOT) and Carl Icahn = higher stock price
The latest Motorola (MOT) story is quite interesting. Carl C. Icahn, the billionaire investor is seeking a seat at the Motorola board. The stock is up 6 percent today on the news. Folks, it’s time to buy Motorola. As we have mentioned before, MOT at the current level is a buying opportunity. It appears Mr. Icahn assessment is inline with ours, Motorola stock is cheap and was oversold.
Last year he took the same tactic with Time Warner (TWX). After buying TWX when it was dirt cheap, he acquired enough shares to get the attention of their board. He then persuaded the company to take action to increase shareholder value. Today, TWX is up almost 50 percent since he persuaded TWX to borrow money for stock buybacks. We predict Mr. Icahn will do the same with MOT. It would be foolish on the part of MOT to not give this man a seat at the table. Just the very presence of this man will drive their stock prices up. Regarding stock buy back, given the cost of borrowing money is still cheap, it would make sense for MOT to pursue this strategy. As a MOT investor, we are excited.
The only concern with Mr. Icahn is his track record tells us he is unable to get along with management. His tough style could ignite internal conflicts, which could sometimes cause more problems. On the flip side, perhaps this is what MOT needs, someone to stir the pot and light a fire under their behinds to get this moving in the right direction again.
