By Rex Crum, MarketWatch
SAN FRANCISCO (MarketWatch) -- Google Inc. reached into its deep
cash stash Monday and said it would pay $12.5 billion in cash to
acquire Motorola Mobility Holdings Inc. in a bid to secure a slate
of wireless patents and increase the market position of the Android
operating system.
Motorola's (MMI) shares climbed by $13.90, or almost 57%, to
$38.36 after the acquisition was announced. The selling price
values Motorola at $40 a share -- a 63% premium over the stock's
closing price last Friday.
The deal is also the largest acquisition in Google's history,
quadrupling the $3.1 billion Google paid for DoubleClick in 2007.
The acquisition comes just eight months after Motorola split into
two separate companies: Motorola Mobility, which is responsible for
smartphones and consumer products, and Motorola Solutions Inc.
(MSI), which took over the old Motorola's business and networking
product lines.
Motorola Solutions shares rose about 1% in afternoon trading
action.
However, Google (GOOG) gave up $14.65 a share, or 2.6%, to slip
to $549.23 after the deal's announcement.
Nokia Corp. (NOK) rose 58 cents a share, or 11%, to $5.95
following reports that the handset maker could benefit from
Google's acquisition of Motorola Mobility, as that deal could help
increase the value of Nokia's own wireless-technology patents.
Among other tech stocks, IBM Corp. (IBM) was up $3.57, or 2%, to
$171.71 after Goldman Sachs analyst Bill Shope raised his rating on
the tech giant to buy from neutral, and lifted his price target to
$195 a share from $170. Shope cited IBM's diversified business
portfolio among the reasons for his upgrade.
Shope also cut his rating on printer company Lexmark
International Inc. (LXK) to sell from neutral, saying that the
company's supplies revenue is likely to come under industry
pressure. Lexmark's shares fell 23 cents to $31.46.
Shope wasn't the only Goldman analyst busy cutting and raising
stock ratings on Monday.
Analyst Simona Jankowski cut Juniper Networks Inc. (JNPR),
taking down the networking equipment maker to neutral from buy, and
also lowered Brocade Communications Systems Inc. (BRCD) sell from
neutral. Additionally, Jankowski lifted F5 Networks Inc. (FFIV) to
neutral from sell.
Dell Inc. (DELL) was up by 43 cents, or almost 3%, at $15.31, a
day ahead of the PC company's quarterly financial results.
The Nasdaq Composite Index (RIXF) rose 32 points to 2,540, while
the Morgan Stanley High Tech 35 Index (MSH) and the Philadelphia
Semiconductor Index (SOX) both rose 1.3%.