As a company, Motorola has had its ups and downs. Between the success of the super-thin RAZR, and its first Android smartphone (the Droid), the company’s status was held in question. Things were so bad that in order to restore its financial order, the company was considering selling off its handset business.
It has been known for a few weeks that Motorola was going to split up the company. Today, the company, whose mobile sales have been booming thanks to their commitment to Google’s Android operating system, have announced that they will officially complete the split on January 4th, 2011. The split will turn the company into two separate entities and aims to financially benefit the corporation and its shareholders. One half of the company will go by the name Motorola Mobility, and the other will be dubbed Motorola Solutions.
Motorola Mobility (stock symbol MMI) will be in charge of phones and set-top boxes, while Motorola Solutions (stock symbol MSI) will be the parent company, focused on the business side of things. Here’s what will happen for stockholders:
- The distribution will be made prior to the market open on Jan. 4, 2011 to Motorola, Inc. stockholders of record as of the close of business on Dec. 21, 2010.
- Motorola, Inc. stockholders of record will receive 1 share of Motorola Mobility common stock for every 8 shares of Motorola common stock they hold.
- Immediately following the distribution of Motorola Mobility common stock to Motorola stockholders, Motorola will effect a 1-for-7 reverse stock split of Motorola common stock, which will become effective prior to the market open on Jan. 4, 2011.
It will be interesting to see how this split actually affects the company. Usually, when a reverse split happens, it doesn’t bode well for shareholders. Hopefully this move will at least prove to strengthen Motorola’s place in the mobile market. After all, they’ve really upped their smartphone game as of late.