Motorola shares rise 11 pct ahead of phone launch

NEW YORK, Sept 2 (Reuters) - Shares of Motorola Inc MOT.N closed up more than 11 percent on Wednesday as investors bought into the stock ahead of its highly anticipated Android phone announcement slated for Sept 10.

Motorola, which reorganized its handset unit to focus on high-end phones based on Google Inc's (GOOG.O) Android system, saw its shares rise sharply in the last hour of trade to finish up 80 cents at $7.82, It continued to rise after the New York Stock Exchange close.

Some analysts were puzzled by the sharp rise because Motorola had revealed the plan for an announcement the week before. But others said investors were covering short positions in case the company's shares rise after the news next week.

"There could be some interest in the stock because of the phone launch coming up," said Deutsche Bank analyst Brian Modoff. He said short sellers, who typically bet on a stock price declining, were likely covering their positions ahead of the announcement.

Motorola also attracted bullish option plays and heavy volume on Wednesday. Traders exchanged about 66,000 contracts, five times the average daily volume, according to option analytics firm Trade Alert.

WhatsTrading.com option strategist Frederic Ruffy said sellers of the January, 2010 $7.50 and the October $7 and $8 put options drove a lot of the flow, while some players bought January, 2010 $7.50 calls and $8 calls with September and October expirations.

While Motorola's valuation has plummeted in the last few years as it has steadily lost market share, its stock has more than doubled since May as some investors bet that strategy changes in its mobile devices business would pay off. (Additional reporting by Doris Frankel in Chicago) (Reporting by Sinead Carew in New York and Doris Frankel in Chicago; Editing Bernard Orr)