Motorola Mobility’s 15% Pop on Friday Fizzles, Stock Upside is Nil for Now

July 5th, 2011 by Trefis Team
-34.42%
Downside
32.27
Market
21.16
Trefis
MMI: Motorola Mobility logo
MMI
Motorola Mobility
Motorola Mobility Stock Price Chart

Source: Google Finance

Motorola Mobility (NYSE:MMI) stock had a sudden 15% jump on Friday. We believe that the recent auction for Nortel’s patent portfolio could have been responsible for this run-up. Nortel had about 6,000 patents, and the consortium of Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Research in Motion (NASDAQ:RIMM), EMC (NYSE:EMC), Sony and Ericsson bought it for $4.5 billion. [1] Motorola Mobility has about 17,000 granted patents and approximately 7,500 pending patent applications, but has a market cap of only $6.9 billion. [2] So the market was looking at how much these patents could be worth based on the Nortel auction, which could have been inflated for competitive reasons.

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We don’t differ much from market, and have a $24.60 price estimate for Motorola Mobility stock.

See our complete analysis for Motorola Mobility stock here

Notes:
  1. Apple Joins Microsoft, RIM in $4.5 Billion Buy of Nortel Patents, Bloomberg, July 1st, 2011 [↩]
  2. Number of patents information mentioned in Motorola Mobility’s 2010 annual filings filed with SEC [↩]