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Motorola Expects To Report Poor Earnings; Investor Carl Icahn Turns Up The Heat

In a letter to Motorola shareholders, investor Carl Icahn noted that he and his investing affiliates control nearly 3% of the company's stock and argued that should be enough to entitle him to a board seat.
In advance of expected poor earnings report expected on Wednesday, Motorola management is dealing with a renewed effort by billionaire investor Carl Icahn to push his way onto the board of directors of the firm.

In a letter Friday, Icahn noted that he and his investing affiliates control nearly 3% of Motorola stock and argued that should be enough to entitle him to a board seat. Motorola management has already signaled it will resist the Icahn effort.

In the letter to Motorola shareholders, Icahn targeted Motorola management and existing board members. "My experience tells me that Motorola's problems reflect not only operational failures, but also symptoms of a passive and reactive board," Icahn wrote. "Clearly our Board members' top priority should be to hold management accountable for fixing Motorola's current operational problems -- and if I am elected to the Board I will do so."

Motorola had no immediate response to the latest Icahn effort. The firm has already indicated its earnings will be under pressure in the coming months.

Motorola saw its earnings drop in the last quarter and it has traced much of its troubles to a decline in prices of its once-popular Razr mobile phone handset line that commanded high prices when they were initially introduced several months ago.

The company recently introduced a brace of new products and while some have been highly praised by mobile phone analysts, it will be months before they can contribute much to the bottom line of the firm.

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