Doubts Cast on Lenovo’s Purchase of Motorola

4 Feb

Not everyone appears to be as optimistic towards the prospects of Lenovo’s $US 2.9 billion Motorola acquisition as the Chinese company’s CEO is, according to a recent article from Businessweek.

Says Bruce Einhorm, a reporter for the abovementioned publication…

“Since Lenovo’s announcement last Wednesday (Thursday, here in China), investors in the Chinese company’s Hong Kong-listed stock have soured on Lenovo. Today was especially ugly: After taking off last Friday and Monday for Chinese New Year, investors began the Year of the Horse by dumping Lenovo shares. By the end of trading on Tuesday afternoon, Lenovo shares had plunged more than 16 percent.”

And Harrison Cho, a renowned analyst from Samsung Securities (via Businessweek):

“The purchase seems to overvalue Motorola’s past success…As the Motorola deal excludes patents, Lenovo is in effect paying USD2.9b for the Motorola brand—one with limited value in the current market…Given the increasing importance of intellectual property, we believe the acquisition of patents would be more valuable than buying a failing global firm’s brand.”

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