October 2, 2022

DealBook: The Icahn Effect, Motorola Edition

Will Motorola Mobility feel the Icahn Effect?

The billionaire investor Carl C. Icahn has some advice for the cellphone unit: sell off your patents.

Mr. Icahn, according to a recent regulatory filing, is urging Motorola Mobility to “explore alternatives regarding its patent portfolio to enhance shareholder value.”

He noted a lucrative precedent for the strategy. Earlier this month, the defunct telecommunications equipment maker Nortel Networks agreed to sell 6,000 patent assets for a tidy sum of $4.5 billion to a group that included Apple and Microsoft.

By Mr. Icahn’s estimate, Motorola’s portfolio has even more potential. As he contends, Motorola is sitting on “substantially larger” portfolio than Nortel, which “includes numerous patents concerning 4G technologies.” He said it has “significant value.”

It worth listening to Mr. Icahn, at least when it comes to sales.

As the Deal Professor, Steven M. Davidoff, reported earlier this week, companies that are sold — at Mr. Icahn’s urging — see their stock rise 25 percent on average. Those that don’t follow his strategy see their shares fall by roughly 60 in the 18 months that follow, according to a study entitled, “Is Carl Icahn Good for Long-Term Shareholders?”

Now, Mr. Icahn isn’t specifically calling for Motorola Mobility to sell itself outright. But it could be worth paying attention, given the Icahn Effect.

Article source: http://feeds.nytimes.com/click.phdo?i=d9f2238f915e8c20e69d36ac66518598

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