Motorola: An Unnecessary Fear Of Icahn

Posted: April 22, 2007 at 10:14 am

Motorola (MOT) is encouraging it shareholders to vote against Carl Icahn joining its board of directors. The raider has a 2.9% position in the big handset and telecom equipment company.

Some observers would argue that Mr. Icahn has created value for other shareholders by taking positions in Time Warner (TWX), WCI Communities (WCI), and MedImmune (MEDI). But, Motorola’s argument is that Mr. Icahn is a tech boob who has no idea how Motorola works: “Even Carl Icahn would admit that he is not technologically savvy, or knowledgeable about our businesses,” the company said in an e-mail.

Taking a look at Motorola’s objection about Mr. Icahn shows that it is posturing on the face of it. Among the executives on Motorola’s board are the head of PepsiCo (PEP) and the chief marketing officer of Procter & Gamble (PG). Perhaps they both have PhD.s in mechanical engineering. But, probably not.

Mr. Icahn’s position is clearly that shareholders in the company are taking a bath and they he can help do something about that. Having him on the board would be unpleasant for Motorola’s management, but "the sight of the gallows focuses the mind." MOT stock is down about 22% in the last six months, and there is no excusing that.

Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.

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