

Google to own $750 million Lenovo stake after Motorola deal closes: HK exchange - alexeichemenda
http://www.reuters.com/article/2014/02/07/us-google-lenovo-idUSBREA1606B20140207
[EDIT : Techcrunch removed article, here&#x27;s another link (thank you w1ntermute) :
http:&#x2F;&#x2F;www.reuters.com&#x2F;article&#x2F;2014&#x2F;02&#x2F;07&#x2F;us-google-lenovo-idUSBREA1606B20140207
======
presty
"Google paid $750 million for a 5.94% stake in Lenovo Group on Jan. 30,
according to a disclosure on the Hong Kong stock exchange. The purchase was
made on the same day after Google announced that it had agreed to sell the
Motorola brand to Lenovo for $2.91 billion, but will keep most of the handset
maker’s patents.

The purchase of shares might be part of the deal, in which Lenovo agreed to
pay a total of $2.91 billion, with $750 million in Lenovo ordinary shares,
$660 million comprised of U.S. cash, and the remaining $1.5 billion in a
three-year promissory note.

According to one of our sources, Google had wanted to sell Motorola for some
time before striking the agreement with Lenovo because the handset brand has
yet to live up to its purchase price, but had to hold off on selling the
division for tax reasons. On the other hand, buying Motorola helps Lenovo
build out its cell phone business. There were rumors in October that it had
submitted a bid for BlackBerry, but was turned down."

~~~
wavesounds
I'm curious, why this isn't insider trading?

Edit: I misread the post, they did buy it after the announcement which means
it's public knowledge

~~~
Mikeb85
Because of this: "The purchase was made on the same day after Google announced
that it had agreed to sell the Motorola brand to Lenovo for $2.91 billion"

The purchase was made after the announcement. Furthermore, it was part of the
Motorola transaction itself, and Google didn't exactly gain anything in the
short term (Lenovo shares tanked in the days following the transaction).

------
coke
No, Google Didn't Just Buy $750 Million Worth of Lenovo Shares:
[http://on.recode.net/1eDFe17](http://on.recode.net/1eDFe17) via @InaFried

~~~
001sky
"Reporting showed that, in fact, Lenovo was merely disclosing what Google
might own, should the deal go through"

It's not clear if these are options or contingent obligations. If the latter,
the original story may be closer to the truth than this "clarification".
Either way, its news that was non-obvious from earlier announcements.

------
w1ntermute
Here's another article, since the linked one seems to be down:
[http://www.reuters.com/article/2014/02/07/us-google-
lenovo-i...](http://www.reuters.com/article/2014/02/07/us-google-lenovo-
idUSBREA1606B20140207)

~~~
alexeichemenda
Thanks, I've changed the link now.

------
simplezeal
Apple, recently Microsoft and now Google are either making or stake holders in
PC manufacturing. So much for post-PC era.

~~~
nly
What stakes do Microsoft and Apple own in PC manufacturing?

~~~
serge2k
Well for Apple it would probably be their own PC business. maybe they sold
that when I wasn't paying attention.

~~~
nly
I thought he was implying they had a stake in another non-Mac business.
Mentioning Apple otherwise seems odd, seeing as they predate all the other
players in the PC space.

------
btian
Grossly misleading title.

The title on Reuters is "Google to own $750 million Lenovo stake after
Motorola deal closes: HK exchange", which is what it is.

~~~
alexeichemenda
They have changed the title a couple of times, it was not this title when
reuters initially published the article.

------
pasbesoin
Well, then, Goog, tell them to fix what they've been doing to their Thinkpad
line. Thanks.

------
netcan
I'm genuinely confused about large companies constantly "reinvesting" their
profits. I understand that a case can often be made for this or that strategic
investment and that this is part of complicated maneuvering, paying in stock
and such. I just don't understand the value (from a shareholders perspective)
of owning share in Google that owns shares in some other company.

That aside, why does Google need to own stock in companies? Why not return
money to investors and let them buy whatever stock they want.

~~~
bgilroy26
It may have been the case that Lenovo could not afford to pay 3B in cash over
the next three years.

Using their own stock helps them compensate Google for how much they feel
Mobility is worth without putting themselves in a tough liquidity position
etc.

~~~
netcan
I get that there are considerations like this. But in that case, would it mean
that Google should gradually sell off this stock?

~~~
Consultant32452
Large corporations hold on to all sorts of assets as investments. This can
range from stocks and bonds to real estate or intellectual property. This is
very common.

Tangentially related to this transaction you may or may not be aware that
pretty much any company that funds its own insurance (most large companies)
are required by law to hold investments that will help carry them over for any
insurance claims. So there is some fund they hold that has stocks, bonds, etc.
set aside so that they are covered for insurance claims. The same is true of
pension funds.

------
nly
Makes sense to keep a foot in that door. Lenovo are eating the PC market, and
this will also no doubt ensure things like Android, Chromebooks and Google
search by default remain on Lenovos agenda.

------
RaSoJo
Are we seeing a thawing of relations between Google and China now?

------
neves
What does it means for Moto G (the cheap and good android phone) and Moto X
(the Nexus 5 competidor)? Is Google quitting Motorola?

------
msoad
I'm getting 404 on this link. Did they just pulled the article away?

~~~
alexeichemenda
Yes they did. Don't really know why, but it was fine a couple of minutes ago.

~~~
jeroen
Because it was wrong:

[https://news.ycombinator.com/item?id=7195640](https://news.ycombinator.com/item?id=7195640)

