Motorola Inc. (NYSE: MOT) shares are under pressure after few buyers appear to be interested in its handset business. The division has been on the auction block for three weeks and top vendors Nokia Corporation (NYSE: NOK), Samsung Electronics, and LG Electronics have all expressed zero interest. This has many investors concerned that the great Carl Icahn may have over-estimated the unit’s value. This has pushed the stock down below $11.50, a level not seen since Carl Icahn first took an interest in the company. So, is this a stock worth watching at these levels?

Motorola’s prospects may look bleak, but not everyone is convinced that the company is in trouble. Many long-term investors insist that one bad year on the design side doesn’t necessarily mean it is in serious trouble. Others believe that the company would still represent a great value for someone who wants to step into the wireless arena. And what about the lack of interest for the handset division? There are some that believe buyers are worried that the products may not be worth as much without the Motorola logo, which means that it is simply an “integration decision” rather than a “financial decision” not to buy.

Billionaire Carl Icahn also continues to count himself among the bulls on the stock. The activist investor insists that the handset division is worth $19 billion and needs to be separated in order to attract top management. This valuation is equal to the divisions sale’s last year and compares to Motorola’s total market value of $25.7 billion. The actual valuation of the unit can be debated. It produced one in every three cell phones within the U.S. market last year, but it did so with losses totalling $1.9 billion. Meanwhile, there are already signs that carriers are beginning to feature more phones from other competitors.

In the end, this is bad news for Motorola shareholders. A prolonged search process only further damages the prospects of the division as many more analysts are switching to a “sell” on the company. Shareholders can count Carl Icahn on their side, however, who may opt to take more drastic measures and call for a spin-off, private equity buyout, or other method to unlock the value in the unit. Regardless, this is definitely a stock that is worth watching over the next few months!

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