Activist investor Carl Icahn is urging Motorola Mobility to find ways to "enhance shareholder value" through its 17,000-plus patents, after a consortium of technology companies bought Nortel Networks' intellectual property portfolio in a bankruptcy auction for approximately $4.5 billion.
Icahn, in a 13D filing with the Securities and Exchange Commission, said he "believes that the Issuer's patent portfolio, which is substantially larger than Nortel Networks' and includes numerous patents concerning 4G technologies, has significant value. In addition, there may be multiple ways to realize such value given the current heightened market demand for intellectual property in the mobile telecommunications industry."
After Icahn's filing, Motorola Mobility shares climbed more than 22% Thursday to a peak of $27.70 per share, before closing at $25.87 per share (up 12.4%) for the day.
In a statement, Motorola Mobility said its board and management team "continuously reviews the Company's strategic direction and opportunities that it believes are in the best interests of the Company and all of its stockholders."
"Since Motorola Mobility became a new, independent public company in the first quarter of 2011, it has delivered innovative products and solid growth, including 22% revenue growth during its first quarter," the company said. "Motorola Mobility has achieved these results, in part due to the fact that it has one of the strongest and most respected patent portfolios in the industry with over 17,000 patents and 7,500 pending."
On July 11, a bankruptcy court approved the sale of Nortel's approximately 6,000 patents to group of six companies: Apple, Microsoft, Research In Motion, EMC, Ericsson and Sony. Previously, Google had offered $900 million in a "stalking horse" bid for the patents.
Icahn, Motorola Mobility's largest shareholder, owns an 11.4% stake in the company.
Icahn had urged Motorola to split -- which the company ultimately did, effective Jan. 4, 2011. Motorola Inc. separated into two entities: Motorola Mobility, which combined the cable set-top and video infrastructure business with the resurgent mobile devices group, and Motorola Solutions, which merged the enterprise and government communications business units.