Google Made A Massive Investment In Lenovo The Day After It Sold Motorola


Google made a surprise announcement at the end of January that confirmed it was selling Motorola to Lenovo for $2.91 billion, but the search giant seemingly forgot to tell us that it made a big investment in the Chinese consumer electronics manufacturer the following day.

Reuters reports that Google will pay Lenovo $750 million for a 5.94 percent stake in the company.

The investment was revealed in a disclosure on the Hong Kong stock exchange. Google will acquire 618.3 million shares in Lenovo in total, priced at $1.213 each. The deal will reportedly be finalized once Lenovo’s purchase of Motorola has been closed.

Lenovo also purchased IBM’s low-end server business last month, and investors has criticized its decision to spend a combined $5 billion on acquisitions. Since the Motorola deal was announced on January 29, the company has lost 24 percent of its market value, and five major brokerages have downgraded their outlook.

Many analysts believe Lenovo overpaid for Motorola, which Google bought for $12.5 billion back in August 2011, and that it will have a difficult time turning the unprofitable business around. Its latest handsets, the Moto X and the Moto G, appear to be popular devices, but reports have claimed they’re not selling all that well.

Nevertheless, Lenovo’s purchase has taken it from the fifth-largest smartphone maker in the world to the third-largest.