Sector Glance: Handset Makers Rise
11.07.2007 21:27
Computers
- Source: Forbes
Shares of handset makers traded mostly higher Wednesday, with shares of Motorola Inc. rising as a rumor swirled that its chief executive may soon resign. Motorola (nyse: MOT - news - people ) shares added as much 2.7 percent, to $18.10 during the session before edging back to close up 33 cents, or 2 percent, at $17.95. Motorola spokeswoman Kavita Manek said the company does not comment on rumors. The rumor followed blog postings from activist investor and money manager Eric Jackson, who called for shareholders to support the removal of Motorola head Ed Zander in efforts to improve the company's performance. In April, the Chicago company posted its first quarterly loss since 2004 due to disappointing cell phone sales, and said it would post lower-than-expected earnings in its second quarter. Motorola's stock has declined 14 percent year-to-date. In a Monday posting on his blog, Breakout Performance, Jackson outlined actions that he called "a 'Plan B' to put Motorola on a path back to its rightful place as the leader in worldwide communications." These actions include replacing Zander as chief executive and chairman, and replacing several company board members. In telephone interviews Wednesday, American Technology Research analyst Mark McKechnie and Argus Research analyst Jim Kelleher said they thought the rumor that Zander could leave Motorola was pushing up the company's shares. McKechnie said shareholders may or may not be dissatisfied with the CEO's performance. "You never know. Shareholders can be kind of impatient here or there," he said. But the analyst cautioned the company's problems are probably less centered around its CEO and more around its culture and upper-management issues that have played out over the last few years, like the departure of former president Mike Zafirovski. Kelleher said in the past the company's board has effectively said it won't bow to activist shareholder pressure, "so for another activist to come in, rattle his sabre and for Motorola to buckle would seem to undermine ... their story." Here's how the key handset makers' shares fared Wednesday: Apple Inc. (nasdaq: AAPL - news - people ), up 4 cents to $132.39. Palm (nasdaq: PALM - news - people ) Inc., up 13 cents to $16.58. Research In Motion Ltd. (nasdaq: RIMM - news - people ), up $1.82 cents to $211.07. Nokia Corp. (nyse: NOK - news - people ) American Depositary shares, up 8 cents to $28.86. __________ Questions or comments about this story should be directed to the Financial News desk of The Associated Press at 212-621-7190. Copyright 2007 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed
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