Standard & Poor’s cuts Google’s rating
Firm says investors should sell stock, downgraded rating from ‘Buy’ to ‘Sell’
Standard & Poor's is telling Google investors that they should sell their stock after news of the panned purchase of Motorola, according to the Press Association.
Standard & Poor's said that it believes the search leader's decision to buy Motorola Mobility increases the risk to the company and its shares.
Google revealed earlier this week that it will pay $12.5 billion for Motorola Mobility, one of the major makers of phones using the Google Android OS.
S&P said that although the acquisition would include a large batch of patents, this might not be enough to stave off intellectual-property issues relating to Google Android.
It downgraded its rating on Google's shares to ‘Sell' from ‘Buy', and said that the transaction will hurt Google's growth, margins and balance sheet.
S&P cut its price target for Google's stock by $200 to $500.
Google shares fell along with the overall market on Tuesday, slipping $18.23, or 3.3%, to finish trading at $539.