By Rex Crum, MarketWatch
SAN FRANCISCO (MarketWatch) -- News of Google's $12.5 billion
acquisition of Motorola Mobility drove sharp gains across the tech
sector on Monday, with several other firms in the wireless space
getting a boost from the deal.
Google (GOOG) announced a deal on Monday to pay $40-per-share in
cash to acquire Motorola Mobility Holdings Inc. (MMI) in a bid to
secure a slate of wireless patents and increase the market position
of the Android operating system. Motorola's shares were up nearly
56% by Monday afternoon after the acquisition was announced, while
Google shares slipped by 1.7% to $554.
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.
The news gave a boost to speculation around other wireless
handset makers that have their own broad patent portfolios. Nokia
Corp. (NOK) jumped 14%, to $6.13, while Research In Motion (RIMM)
was up nearly 8% to $26.53.
Nokia is developing devices for Microsoft's Windows Phone
operating system. RIM is working to launch a new slate of handsets
over the next few months as well as a new operating system next
year.
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 3.5% at $15.39, a day ahead of the PC
company's quarterly financial results.
The Nasdaq Composite Index (RIXF) rose 1.1%to 2,536, while the
Morgan Stanley High Tech 35 Index (MSH) and the Philadelphia
Semiconductor Index (SOX) both rose 1.3%.