Motorola, Inc., the manufacturer of mobile phones and two-way radios amongst other products, plans to split the company at the turn of the year. Much like AT&T split their holdings years ago, Motorola plans to break the company into two separate holdings.
The phone and television set-top box business will make up Motorola Mobility and will remain under co-Chief Executive Officer Sanjay Jha, while the other co-CEO, Greg Brown, will run Motorola Solutions that will house the remaining portions of the business including bar-code scanners, walkie-talkies and other emergency-communication equipment.
Investors will benefit with a company split as they will receive on share of Motorola Mobility Holdings Inc. for every eight shares they own now. Immediately following the split the company will exchange seven old shares of Motorola for one new share in the remaining company which would increase the stocks value by a commensurate amount thus increasing marketability.
After the announcement of the impending split Motorola shares rose 35 cents, or roughly 4.5 percent, to $8.01 on the New York Stock Exchange. In case you want to keep an eye on the two Motorola Holdings after the split, Motorola Solutions will be trading under the symbol MSI, starting January 4, 2011, while Motorola Mobility will use the stock symbol MMI.
Most new holdings of company splits do not show a profit initially and that will be no different for Motorola Mobility as they predict a loss during the first quarter, yet see a significant improvement from the year prior.