Ever since Google announced its $12.5 billion deal to acquire Motorola on Monday, its stock has been taking a hit. Today, with the entire market in a tailspin over global economic concerns, Google’s market cap is down $17.4 billion (in midday trading) since Friday’s close. In other words, Google has lost more market value than the entire amount it is going to pay for Motorola.
And the proposed deal (which still must pass regulatory review) is all cash, so fluctuations in Google’s share price won’t affect the final amount Google has to pay. Of course, by the time the deal closes probably next year Google’s market cap will be vastly different than it is today. And today’s 22-point drop in Google’s stock price is related more to the overall market rout than to the Googorola deal.
Still, as of yesterday, Google’s market cap was down $10 billion since the deal was announced (based on Google’s 326 million shares outstanding). There is no getting around the fact that Wall Street does not like this deal.
It makes you winder how much of that $17.4 billion of wiped out value can be chalked up to the deal versus the market tanking in general.
Google provides search and advertising services, which together aim to organize and monetize the world’s information. In addition to its dominant search engine, it offers a plethora of online tools and platforms including: Gmail, Maps, YouTube, and Google+, the company’s extension into the social space. Most of its Web-based products are free, funded by Google’s highly integrated online advertising platforms AdWords and AdSense. Google promotes the idea that advertising should be highly targeted and relevant to users thus providing...
Motorola Solutions, Inc. (NYSE: MSI) is a data communications and telecommunications equipment provider that succeeded Motorola Inc. following the spin-off of the mobile phones division into Motorola Mobility Holdings, Inc. in 2011. The company is headquartered in Schaumburg, Illinois, a Chicago suburb. Motorola Solutions is composed of the Enterprise Mobility Solutions division of the former Motorola, Inc. Motorola Solutions also previously had a Networks division, which it sold to Nokia Siemens Networks in a transaction that was completed on April...
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