Tech Stocks Skyrocket After Google's Motorola Acquisition

 @http://twitter.com/jtalty on August 15 2011 10:43 AM

Google's $12.5 billion acquisition of Motorola Mobility sent shock waves through the industry, while reviving a few slumping technology companies.

Wall Street opened up 120 points after the acquisition was officially announced by the Mountain View-based technology company.

Motorola Mobility (NYSE:MMI) saw its stock skyrocket 56.89 percent, from a previous close of $24.47 to $38.39. Google agreed to purchase the company for $40 a share, or $12.5 billion. Motorola has approximately $3 billion cash in hand, putting the total cost of the deal at $9.5 billion for Google.

The decision had impacts all across the market, but notably in the technology sector.

Nokia Oyj (NYSE:NOK) and Research in Motion (NYSE:RIMM) both saw their stocks take a jump in the positive direction, after languishing during recent weeks. Nokia jumped up 13.43 percent and RIM by 4.56 percent, as speculation began that both companies could be acquisition targets.

After Google's announcement, there was speculation that Microsoft could be interested in either Nokia or RIM, as the arms race for patents continues amongst Google, Microsoft, and Apple.

Google was irritated when Microsoft, Apple, and others teamed up to prevent it from purchasing patents while acquiring Nortel Networks. Its purchase of Motorola Mobility appears to be its response to mounting lawsuits against its Android phones.

Microsoft or any other company would face a bit more difficulty in acquiring either Nokia or RIM. RIM and Nokia would both be considerably more expensive than Motorola. Nokia has a market value of $20.3 billion and RIM $13 billion, while pre-acquisition Motorola had a value of $7.3 billion.

Microsoft saw its stock go up 1.24 percent as some proposed that Google's Motorola purchase could enable companies, such as Samsung and HTC, to more seriously consider Windows' line of phones.

"Windows Mobile seems more relevant than it did last night, and it seems now to have a better chance of becoming a third ecosystem," said Mike Walkley, an analyst for Canaccord Genuity, told Barron's.

The acquisition created speculation that pushed up Nokia and RIM, but also knocked down a company by ending speculation. InterDigital Inc. saw its shares plummet close to 20 percent after the stock had been built up through rumors it was a Google acquisition target.

InterDigital holds patents that some speculated could draw Google's interest, but it is doubtful Google will purchase the company after investing $12.5 billion in Motorola.

 

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