Motorola Mobility's valuation takes a hit in trading

Motorola (NYSE:MOT) began trading as two separate companies on the New York Stock Exchange Friday, and Motorola Mobility took a hit as investors sought to value the new entities. However, since the company's split is not yet official, stocks of the two companies are not yet being traded live.

Motorola plans to split in early January into Motorola Mobility, which will house the company's handset and set-top box units, and Motorola Solutions, which will sell radios to enterprises and government as well as handheld scanners. Motorola Mobility was trading under the ticker "MMI.WI," and Motorola Solutions was trading as "MSI.WI." The "WI" stands for "when-issued" and this type of trading allows institutional and other sophisticated investors to value companies ahead of live trading. Motorola will stop trading as "MOT" on Jan. 4.

Motorola Mobility lost 9 percent to $25.05 per share, giving it a total value of about $7.4 billion, while Motorola Solutions rose 3.2 percent to $40.50, giving it a value of $13.7 billion.

Motorola plans to give $3.5 billion to Motorola Mobility, which will use the cash to expand and help pay for acquisitions. Sanjay Jha, Motorola's co-CEO and the man who will lead the Mobility business, said recently that Verizon Wireless' (NYSE:VZ) competitive actions in the first quarter of next year could have "an impact" on Motorola's financial results during the period. Although Jha did not provide additional financial specifics, he said Motorola is working to minimize the problem by expanding its Android smartphone distribution with additional U.S. carriers including AT&T Mobility (NYSE:T), Sprint Nextel (NYSE:S) and T-Mobile USA.

Verizon is widely expected to begin selling the Apple (NASDAQ:AAPL) iPhone early next year.

For more:
- see this WSJ blog post (sub. req.)
- see this Barron's blog post
- see this WSJ article (sub. req.)

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