An Analysis of Motorola Stock

An Analysis of Motorola Stock:

Executive Summary:

Over 75 years ago, in the heart of Chicago, a small company was started with a vision to create something great. Paul V. Galvin, the founder of Galvin Manufacturing Corporation, later to be known as Motorola, felt he had a great product with the invention of the “battery eliminator”. This product allowed battery-operated items to be run on the electricity currents already established within buildings. Galvin had 5 employees and in the beginning had a balance sheet with assets just over $1,000. However, by the end of the first year the earning and potential of Galvin Manufacturing were apparent, when it made a “net earnings of $6,015.” (www.motorola.com) Although Galvin was proud of making six thousand he was completely amazed when his company made a net profit equaling almost 10 million just twelve years later. Even though profits were wonderful, the main reason that business was good was that Galvin pushed the company to continue to make innovative products and devices. This set the corporate mentality, which would stay with the Galvin Manufacturing Corporation, long after it became Motorola in 1947. (www.motorola.com)

Today Motorola is the master in the field of cell phones and electronic devices. Most of us have carried a cell phone at one time or another and the chances that it was a Motorola are significant. This company has managed to keep a large amount of market share within this ever-growing industry, which leads to high investor confidence and a relatively level stock price in an unstable industry.

The Exchange:

The New York Stock Exchange (NYSE), the exchange that lists Motorola stock (MOT), was registered with the U.S. Securities and Exchange commission on October 1, 1934. It has been a symbol of the US economy and maintains its influence on the economy by having an integrity level that cannot be matched. It has a self-regulating structure comprised of two separate divisions of its board; one made up of independent directors and the other comprised of a board of executives. This provides a checks and balance system allowing the Exchange to provide for market sensitivities and regulations (NYSE).

Companies listed on the Exchange have to fulfill certain requirements. They mostly deal with a “minimum distribution of a company’s shares within the United States” (Listing Standards).

Here are a few of the listing standards:

Round-lot Holds (A) 2,000 U.S.

Or

Total Shareholders (A) 2,200

Average Monthly Trading Vol. 100,000 Shares

Or

Total shareholders (A) 500

Gross Revenue most recent yr $75 million

Or

Pretax Earnings for 3 yrs $10 million