Motorola Mobility N9

Software and search engine giant Google Inc. witnessed its stock sharply downgraded by Standard & Poor’s equity analysts following Google’s bid to acquire Motorola Mobility and N9 can also be affected by the news. The company is ready to pay $12.5 billion for Motorola Mobility, while the company was valued at only $7.7 billion the previous day. S&P experts recommend to “sell” Google shares, which were rated as “buy” before the deal was announced, and lowered their price forecast from $700 to $500.

Motorola Mobility N9

The deal involves an acquisition by Google of Motorola Mobility, a company that manufacture smart phones, tablets and TV set-top boxes. Subsidiaries of Motorola Mobility are also included in the proposed acquisition. The acquisitions should protect Android from legal disputes and Motorola Mobility is considered a tool to prevent patent disputes with rival companies, sources close to Google revealed.

The S&P researchers are not convinced Google is able to sustain current growth levels and financials if a deal is sealed with analysts saying they can see greater Google stock risks associated with the acquisition. Motorola Mobility owns an extensive portfolio of patents that can help Google in protecting the Android operating system, developed by the software behemoth.

Following the news on the downgrade by S&P, Google stock lost 3.3 percent of its value and closed at levels near $539 on Tuesday.

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