Motorola has set the price at which it will offer the public share in its chip business, Freescale. But the price, $13, is two-thirds the price it was originally anticipated to be.

The price downgrade follows a cooling of the market toward tech stocks, most notably Merrill Lynch's bearish report on the chip industry (http://www.theregister.co.uk/2004/07/13/chip_stocks_warning/) issued last week. In that respect, Motorola's timing could have been better.

Motorola should gain at least $1.58bn from the sale, of which it plans to keep $1bn, the rest going to Freescale. However, the fledgling chip company will be able to borrow up to $1.25bn from its soon-to-be former parent.

The $13 price-point is somewhat lower than the $17.50-19.50 Motorola had previously flagged (http://www.theregister.co.uk/2004/06/22/freescale_ipo/). Such a price would have yielded $2.13-2.37bn - rising to $2.45-2.73bn if 18.2m shares put aside in case the IPO is oversubscribed are sold. Some 121.6m shares make up the initial, Class A allotment.

Motorola will retain the existing, Class B stock, amounting to 92 per cent of the voting stock, before releasing it to its own shareholders later this year. ®

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Motorola files for Freescale IPO (http://www.theregister.co.uk/2004/06/22/freescale_ipo/)
Freescale Q1 income soars (http://www.theregister.co.uk/2004/04/21/freescale_q1/)
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