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Lenovo to reportedly buy Google's Motorola Mobility for $2.9 billion [update: confirmed] - Page 3

post #81 of 235
Quote:
Originally Posted by island hermit View Post
 

 

It's only a one or two billion dollar loss and Google dumps a money loser... I'd be a happy GOOG shareholder at this point.

But if Google keeps it up, you won't be a happy shareholder in 5-10 years.  Wall St. daily fluctuations are essentially driven by scatter brained babies reading USA Today or the equivalent but less colorful Journal.  No real intellectual illuminati in that crowd.  

 

That's why long term investing is the much more tried and true method of gambling for corporate pink slips.

post #82 of 235
Quote:
Originally Posted by redefiler View Post
 

But if Google keeps it up, you won't be a happy shareholder in 5-10 years.  Wall St. daily fluctuations are essentially driven by scatter brained babies reading USA Today or the equivalent but less colorful Journal.  No real intellectual illuminati in that crowd.  

 

That's why long term investing is the much more tried and true method of gambling for corporate pink slips.

 

Why, I didn't know that.

 

Thank you for your opinion.

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post #83 of 235
Quote:
Originally Posted by Tallest Skil View Post
 

AHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAH


I couldn't stop laughing either.

post #84 of 235
Quote:
Originally Posted by Rogifan View Post


How is it only a one two billion loss? I thought most of MM patents were FRAND. How can they be that valuable?

 

If Google figures that the remaining patents is worth the 8 billion that they've lost on the moto acquisition so far, then that patent portfolio is the most expensive fig leaf ever in the history of human civilization.

post #85 of 235
Quote:
Originally Posted by sog35 View Post
 

 

Total BS Island Hermit. Show me your calculations:

 

Purchase price $12.5 B

Sold set top box unit for $2.3 billion (stock and cash)

http://money.cnn.com/2012/12/20/technology/google-cable-box-motorola/

Sold phone business for $3 billion

Most of the patents are worthless and they lost a decision to Microsoft recently where they tried to get Billions for royalties but the court only gave them a few million.  Lets just be generous and say the patents are worth $1 Billion

http://www.techdirt.com/blog/wireless/articles/20110831/01030115745/are-any-patents-google-got-with-motorola-mobility-any-good.shtml

 

Motorolla was losing about a billion dollars a year from operations.

This does not even count the legal fees to make the acquistion and selling the company.  Also labor cost, severance costs, SEC costs, ect.  That could easily be another one hundred to two hundred million dollars.

 

12.5 cost

-2.3 sell set top business

-3 sell phone business

-1 value of patents

1.0 operational losses under google

 

total = 7.2

 

google tax rate is 24%

https://investor.google.com/earnings/2013/Q2_google_earnings.html

 

Total loss is $5,400,000,000.    Google only made $10B in fiscal year 2012.  So the loss basically wiped out half of year of profits.

 

Now try to spin that as being 'a small loss'.

 

I've seen how well you've done in other areas on this forum.

 

I'll wait until someone from Bloomberg, WSJ, Fortune, NYT or some other actually knowledgeable person says otherwise. Then look at all the fun you'll have quoting from the publication.

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post #86 of 235
Quote:

Originally Posted by sog35 View Post

 

12.5 cost

-2.3 sell set top business

-3 sell phone business

-1 value of patents

1.0 operational losses under google

According to the HN thread it's more like this:

  • 12.5 Cost
  • 0.67 Losses (minus tax)
  • -2.3 STB
  • -3 Motorola Mobility
  • -3 Cash that came with MM
  • -1.7 Tax benefits
  • -1 (assumed) value of patents

 

Total: $2.17 Billion Loss

post #87 of 235
Quote:
Originally Posted by RalphMouth View Post
 

If Lenovo can turn around Motorola like they did IBM's personal computer/laptop business, they are going to become a big player in the US market. Samsung better watch out.


Lenovo never really "turned around" IBM's PC business. IBM's PC business was doing fine when Lenovo bought it.

 

The problem for IBM was that it had completed its transition to becoming a service company, with significantly higher profit margins. The PC business was dragging their profit margins down, and unlike their server business (at the time) it didn't help much in gaining consulting clients. Primarily because PCs were complete commodities by that point.

 

IBM did exactly the same thing a few months ago with their x86 server business (also sold to Lenovo). While this was still profitable, it was also becoming commodified which dragged margins down, and was no longer helping gain services and consulting clients. Note that they did not sell the server hardware businesses which are unique to them (Power, etc) which help them gain significant consulting and services contracts in niches where those lines make the most sense.

post #88 of 235
Quote:
Originally Posted by island hermit View Post
 

 

I've seen how well you've done in other areas on this forum.

 

I'll wait until someone from Bloomberg, WSJ, Fortune, NYT or some other actually knowledgeable person says otherwise. Then look at all the fun you'll have quoting from the publication.

 

you are totally in denial.  I remember you said the Motorolla deal was not a bad thing months ago.

 

Now you are just covering your ass.

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post #89 of 235
Quote:
Originally Posted by sog35 View Post
 

 

you are totally in denial.  I remember you said the Motorolla deal was not a bad thing months ago.

 

Now you are just covering your ass.

 

Hahahahaha... coming from you I'll take all of that as a compliment.

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post #90 of 235
Quote:
Originally Posted by ItsTheInternet View Post
 

According to the HN thread it's more like this:

  • 12.5 Cost
  • 0.67 Losses (minus tax)
  • -2.3 STB
  • -3 Motorola Mobility
  • -3 Cash that came with MM
  • -1.7 Tax benefits
  • -1 (assumed) value of patents

 

Total: $2.17 Billion Loss

 

Those numbers are missing a lot of extraneous costs one can assume they are just magically moving under Google accounting's other R&D funds.

post #91 of 235
Lenovo - "Playing a significant role in the company's success is its relatively low-cost offerings."

Another company run by geniuses racing to the bottom. And a 10 billion dollar loss for the big G - couldn't have happened to nicer bunch of evil doers.
post #92 of 235
Quote:
Originally Posted by jfc1138 View Post

But it's a snoopy thermostat...

I prefer the Woodstock thermostat.
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post #93 of 235

It's a good move for both companies. Google can focus on patents and software, Lenovo can make inexpensive hardware. Of the companies I've dealt with in my retail gig, Lenovo is definitely one of the less objectionable, even if I have to explain who they are (8 years later and I'd say 6-8 times a week I still need to tell people who Lenovo are...).

 

It is good for Apple in that a company who works very hard to keep low margins is going to be taking over a competitor - they will not put the investment in that Google would have. 

 

Feel bad for those people in Texas building the Moto X - they're not long for their jobs. 

post #94 of 235
Quote:
Originally Posted by MagMan1979 View Post

Which re-enforces my point of them being Wall Scum, they are playing favourites with Google! If what you say is true that Motorola was running at a loss for Google, than their loses are greater than $9 billion! So with that much red ink on the balance sheet, no matter how they try to spin it later on their next quarterly, this is still a HUGE loss that demonstrates a tremendous mistake by Google's senior management, and yet they are being rewarded for their stupidity!

And with a name like mistercow, I must be talking to a Google brown noser...

Wall Street isn't a collective or of a singular mindset. Google shed a money loser and thus should make decent profits from now on. People are jumping in on a seemingly turn around.
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post #95 of 235
Quote:
Originally Posted by mdriftmeyer View Post
 

 

Those numbers are missing a lot of extraneous costs one can assume they are just magically moving under Google accounting's other R&D funds.


Do you have a relevant example? I'm just going off what was mentioned in another thread.

post #96 of 235
So the amount of money GOOG was losing every year from Motorola has already been accounted for? Funny..their stock doesn't show that:



1. Lose billions money year-over-year? Stock goes up
2. Sell off money-losing business at a substantial billion dollar loss? Stock goes up
3. Profit
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post #97 of 235
Quote:
Originally Posted by island hermit View Post
 

 

Why, I didn't know that.

 

Thank you for your opinion.

You are most welcome!

Run along now.

post #98 of 235
Quote:
Originally Posted by island hermit View Post

It's only a one or two billion dollar loss and Google dumps a money loser... I'd be a happy GOOG shareholder at this point.

To say its only a 1 or 2 billion loss is absolute nonsense, and phony accounting.
post #99 of 235
Quote:
Originally Posted by island hermit View Post
 

 

I've seen how well you've done in other areas on this forum.

 

I'll wait until someone from Bloomberg, WSJ, Fortune, NYT or some other actually knowledgeable person says otherwise. Then look at all the fun you'll have quoting from the publication.

I also used to wait around for 3 or 4 people with journalism degrees to tell me how to think between ads from their sponsors,

but then high school/college/real-world/brain happened.

 

Sponges are great for absorbing, but not so great at critical thinking.

post #100 of 235
Quote:
Originally Posted by alcstarheel View Post

So the amount of money GOOG was losing every year from Motorola has already been accounted for? Funny..their stock doesn't show that:



1. Lose billions money year-over-year? Stock goes up
2. Sell off money-losing business at a substantial billion dollar loss? Stock goes up
3. Profit

I just checked and the stock is down 16. 09
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post #101 of 235
Quote:
Originally Posted by mdriftmeyer View Post
 

 

Those numbers are missing a lot of extraneous costs one can assume they are just magically moving under Google accounting's other R&D funds.

The other thing not accounted for is the fact that Google probably held on to some things.  Probably patents for the most part, but there could be other contracts/licenses that are not being sold to Lenovo.  Not suggesting what Google kept is worth 9 billion and they definitely lost money on this deal, but I do not think the Motorola being sold to Lenovo is the the Motorola Google bought. 

post #102 of 235
Quote:
Originally Posted by sog35 View Post

 

 

Total loss is $5,400,000,000.    Google only made $10B in fiscal year 2012.  So the loss basically wiped out half of year of profits.

 

Now try to spin that as being 'a small loss'.

 

Well, starting with your $5,400,000,000 number, you left out that the purchase price included operating losses that Motorola had already incurred as Motorola...  This was money spent by Motorola, not Google, that Google got to write off after the acquisition.  $1,000,000,000 domestically and $700,000,000 internationally.  So another $1.7bil lopped off.... down to $3.7billion- and there were additional breaks that were expected to continue on to the tune of $700million/yr until 2019 according to Forbes... so when you factor that in the losses (if any) get pretty small pretty quick, especially since they still hold the patents they deem useful to themselves.

 

I don't think Moto Mobile was a 'win' for Google by any stretch, but the exuberant schadenfreude most of the avid Google haters really isn't all that warranted.

 

To me I'm just a little sad that the inventor of the mobile phone and the only smartphone designed and made in the US is gone =(

post #103 of 235
Quote:
Originally Posted by formosa View Post

All those patent disputes that Motorola brought against Apple (and others) in Europe didn't work out (I assume Google bought Motorola for their patents).

And yet Lenovo has a more expansive (phone) product portolio than Motorola.

Something doesn't add up about this deal...

Sure it does from their point of view - they are a Chinese company buying Western market expertise and business relationships in the mobile industry in markets where they don't currently compete for the purpose of market expansion. The problem is that motorola's market and brand has eroded so significantly that it is debatable how much they can possibly benefit.
post #104 of 235
Quote:
Originally Posted by dasanman69 View Post

I just checked and the stock is down 16. 09
but up $25 after hours.
post #105 of 235
Quote:
Originally Posted by dasanman69 View Post


I just checked and the stock is down 16. 09

 

That was at the close.  It is up over 28 in after hours trading

post #106 of 235
Quote:
Originally Posted by foad View Post

This tied with the fact that Samsung and Google just entered a 10 year cross licensing deal, it looks as though Google will handle more of the software and Samsung will do the hardware. The writing has been on the wall for some time that both Samsung's and Google's mobile future is tied together. Samsung's own mobile OS won't ever get the kind penetration that Android has and Motorola wasn't looking like it would ever catch up to Samsung. With Nokia now becoming a part of Microsoft, the lines in the sand seem to be drawn.

 

It does look like Google sold Moto to appease Samsung. 

post #107 of 235
Quote:
Originally Posted by redefiler View Post
 

I also used to wait around for 3 or 4 people with journalism degrees to tell me how to think between ads from their sponsors,

but then high school/college/real-world/brain happened.

 

Sponges are great for absorbing, but not so great at critical thinking.

 

Great... I've got another groupie.

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post #108 of 235
Quote:
Originally Posted by island hermit View Post

1. Tax losses

2. Money acquired on acquisition

3. Sale of set top boxes (plus 15% stake in Arris)

4. Remaining patent valuation

5. Sale to Lenovo

Sorry, not even close! tax losses are still losses. The portfolio is of little value as already demonstrated. The money acquired is far far from the purchase price. Smoke and mirrors...
post #109 of 235
Quote:
Originally Posted by FreeRange View Post


To say its only a 1 or 2 billion loss is absolute nonsense, and phony accounting.

 

Hey... get in line behind Rogi and Rede if you want to be one of my groupies.

 

To come after me with this phony accounting accusation is strange. Hell, even if I was 2 billion out and the loss was 4 billion, I'd still be much much closer than the people saying 9 billion, 12 billion, 8 billion... 

 

... so, why are you coming after me. Is it love...

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post #110 of 235
Quote:
Originally Posted by FreeRange View Post

To say its only a 1 or 2 billion loss is absolute nonsense, and phony accounting.

This is from the NYT:
Quote:
When Google bought Motorola, the hardware maker had about $3 billion in cash on hand and nearly $1 billion in tax credits. So that brings the original deal’s price down to about $8.5 billion.
Then, Google sold Motorola’s set-top box business to Arris for nearly $2.4 billion. That lowers the price to roughly $6.1 billion.
Now, Google is selling Motorola Mobility — primarily the handset business, along with a few patents — for $2.9 billion. So we’re at about $3.2 billion.

I would round that up to 4 billion. That's one expensive faux pas.
Edited by dasanman69 - 1/29/14 at 4:39pm
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post #111 of 235
Quote:
Originally Posted by FreeRange View Post


Sorry, not even close! tax losses are still losses. The portfolio is of little value as already demonstrated. The money acquired is far far from the purchase price. Smoke and mirrors...

 

Well, at least now I know how much you know.

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post #112 of 235

Give 'em a break. I predict the Nokia acquisition will be even worse.

post #113 of 235
Quote:
Originally Posted by Frood View Post

That was at the close.  It is up over 28 in after hours trading

Thanks, I stand corrected.
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post #114 of 235
Quote:
Originally Posted by Frood View Post

 

To me I'm just a little sad that the inventor of the mobile phone and the only smartphone designed and made in the US is gone =(

 

You do realize that Apple designs not only the phone software, but hardware in the US?  Further 100% of the manufacturing processes and machinery are designed in the US, which are then exported and installed in locations in China?  

 

Foxconn and other assemblers install Apple specified manufacturing hardware and follow Apple procedures to the letter to build their products.  Apple essentially installs their own manufacturing lines into their empty factories.  Perhaps you lack a fundamental understanding of the contract manufacturing process as it relates to modern technology?   Perhaps the final parts assembly line is staffed by foreign workers, the entire process is US made.  

 

While your personal distinction might be personally meaningful, as a patriotic gesture its totally moot, if not hurting the cause.  Better to have 1 Apple full of technology creators, than 1.5 billion foreign screw turners and envelope lickers.  Especially when we have to tell them exactly how to make and lick each screw/envelope.

post #115 of 235
Quote:
Originally Posted by alcstarheel View Post

So the amount of money GOOG was losing every year from Motorola has already been accounted for? Funny..their stock doesn't show that:



1. Lose billions money year-over-year? Stock goes up
2. Sell off money-losing business at a substantial billion dollar loss? Stock goes up
3. Profit

 

Yes because despite the losses, they were still growing.  So now that they won't be continually losing money from the Motorola division, the stock went up.

post #116 of 235
Quote:
Originally Posted by island hermit View Post

 

... so, why are you coming after me. Is it love...

 

Maybe more like stepping in gum...

takes a bit of work to scrape away with a stick.

:smokey:

post #117 of 235
Guys, stop ranting. Google has not lost money here. Not one cent. And I don't mean in a hypothetical sense, in a real world accounting sense.

Back when the Motorola acquisition was made, Google was facing three major threats to Android. Whole world was focussing on the threat from Apple law suits and Oracle law suits. The whole world was looking at how Motorola could help Google dealing with these law suits. It couldn't and it didn't, despite a lot of effort by Google.

But the biggest threat to Android was not from outside - it was from within the Android camp. Samsung was gaining a lot of clout and it was the ONLY player making money on Android. Not even Google itself was/is making money on Android.

Google was obviously worried about the growing clout of Samsung, and wanted to retain some control of Android.

With the recent Samsung cross licensing deal, and with the term being set as 10 years, Google has eliminated the internal threat to Android. So Motorola at least helped Google in some way.

But more importantly the amount Samsung agreed to pay upfront and over the years, more than makes up for the losses on Motorola. All Google had to do was set the duration of the cross licensing to as high a number as it was required, to make it attractive enough to Samsung, that Samsung would pay whatever it was that Google lost on Motorola. And it is clear that the number was 10 years.

The stock is going up today, simply because a loss making company is off Google's neck, and they have managed to do this without any impact to bottom line.

There isn't going to be a big wirite off this quarter.
post #118 of 235
Quote:
Originally Posted by ItsTheInternet View Post
 

According to the HN thread it's more like this:

  • 12.5 Cost
  • 0.67 Losses (minus tax)
  • -2.3 STB
  • -3 Motorola Mobility
  • -3 Cash that came with MM
  • -1.7 Tax benefits
  • -1 (assumed) value of patents

 

Total: $2.17 Billion Loss

Your mixing up cash flow, earnings, and balance sheet items.  Very creative accounting.

post #119 of 235

 

Just sayin'.

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post #120 of 235
Quote:
Originally Posted by redefiler View Post
 

 

You do realize that Apple designs not only the phone software, but hardware in the US?  Further 100% of the manufacturing processes and machinery are designed in the US, which are then exported and installed in locations in China?  

 

 

 

Thinking up a manufacturing process and then actually, you know, *making it* in China is not remotely the same as *actually* making it in the United States.

 

Quote:

Originally Posted by redefiler View Post

 

  Better to have 1 Apple full of technology creators, than 1.5 billion foreign screw turners and envelope lickers.  Especially when we have to tell them exactly how to make and lick each screw/envelope.

 

Wow.  Just wow.

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