Will Google Fizzle or Dazzle After the Motorola Mobility Purchase?
By Bachar Samawi:Following Monday's announcement of the purchase of Motorola Mobility (MMI) by Google (GOOG) for $12.5 billion, Google's shares dropped as much as $17.72 on an intraday basis, touching $546.05, before closing for the day down $6.54 at $557.23. Hence, Google lost as much as $ 5 billion in market capitalization at its lowest point intraday. Meanwhile, as Google paid over 60% premium for Motorola Mobility, that translated to a premium of between $7 billion and $8 billion, possibly explaining why Google stock got punished during the day. For Google to complete such purchase and pay such premium, it must see some added value down the line in the future. Some are debating whether such move is an indication of Google’s strength or weakness, as it seems to be moving to protect itself from Apple Inc. It will be quite a while before we know for sure whether such purchase actuallyComplete Story »
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