Billionaire Icahn Wants On Motorola's Board - InformationWeek

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Billionaire Icahn Wants On Motorola's Board

The investment strategist is putting pressure on CEO Zander to buy back company shares to lift the stock price.

Investment strategist Carl Icahn is stepping up his campaign to gain a seat on Motorola's board of directors with some very tough financial talk.

The billionaire, who ranks No. 24 on Forbes 400 Richest Americans list and made a name for himself with corporate takeovers in the mid-'80s, says Motorola is sitting on a cash horde of more than $11 billion and that the Illinois-based phone maker should buy back its shares to lift the stock price.

Before news of Icahn's interest broke Tuesday, Motorola stock had dropped more than 25% in recent months. The stock jumped nearly 7% Tuesday on news that Icahn, who has a 1.39% stake in Motorola, would seek a position on the company's board of directors.

In media interviews Tuesday, Icahn focused on raising Motorola's stock price, which he said was "unrealistically low."

The activist investor's move puts the heat on Motorola chief executive Ed Zander, who boosted profits for several months after he took over the helm at the firm in 2004, but who has watched profits -- and the stock price -- drop sharply in the last quarter. A chief reason for the profit decline was the drop in price of Motorola's popular Razr mobile phone. The popular phone was initially priced at $499 but has dropped to around $50 in recent weeks.

So far, there have been no indications whether the dynamic between Icahn and Motorola will be collegiate or adversarial. In the media interviews, Icahn indicated he was interested in balance sheet items and not in operational measures at Motorola. The company hasn't taken a stand on Icahn's director's request, and it hasn't yet set a date for its annual meeting.

Zander has a handy reference point in dealing with Icahn through his appointment last week as a director of Time Warner. Icahn has been pursuing a long-running campaign aimed at Time Warner and its AOL unit to lift the price of Time Warner stock.

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