Will RIMM be Acquired?

  • Posted: 22 June 2011 02:58 PM

    Sean Farhy writing for seeking Alpha lays out the case for and against here at Has Research In Motion Bottomed Enough for a Buyout?

    Here’s a list of reasons why RIMM is in play:

    RIMM has no debt, a future p/e of 9x and future price to revenues of less than 1x

    OK, they’re cheap. But if you’re getting little or no value in return, then no price is a bargain.

    RIMM"s market cap is now under $15 Billion.

    First, there’s a reason RIM’s market cap is so low. Second, the market cap would inflate if RIM entered serious buy out talks.

    RIMM controls 8% of the hardware market, and 25% of the smart phone market

    Meaningless. Last year Nokia controlled 50% of the phone market. See burning platform.

    It’s not like RIMM “owns” those market percentages. You can’t “acquire” that market share. When the quality of RIMM’s phones dissapates, so will their market share. RIMM’s market share is not a “moat”, it’s an open wound that will bleed them dry.

    RIMM has excellent branding and inroads when it comes to the “corporate client.”

    The last thing Apple wants is RIMM’s brand. They have a bigger, better brand of their own, thank you very much. And Microsoft? Makes no sense. If they acquire RIMM, it would be to convert RIM phones to Windows Phone 7 phones. So how does your “Brand” help you there? The moment RIMM moves away from what makes it unique, it moves away from the value of its Brand, too.

    RIMM’s new Playbook note pad could make an excellent product line for one of the companies listed below to venture into.

    No it couldn’t. The RIMM Playbook is a walking, talking clusterflock. The word “fatally flawed” comes to mind.

    But for the sake of argument, let’s assume that the Playbook is all that. Would it be valuable to Apple? No. Microsoft? They want the full Windows desktop experience on their tablets. Can the Playbook give them that? No. HP? They already have their own OS. Who then would profit from acquiring a tablet that is intimately integrated into a failing phone line? Who?

    QNX, RIMM’s new Blackberry operating system, is where the bulk of RIMM’s R&D is being spent. A discontinuation of QNX and elimination of more employees could add value to the equity side by reducing expenses and preserving assets.

    Sure, buy the company, keep all the failed parts and toss away the only assets that have value. Brilliant.

    RIMM has over $4 in cash per share.

    I’m going to use small words so that you all can fully comprehend my meaning:

    “So what?”

    Sean Farley has actually written a very nice article on this subject. Well worth the read.

    But I’m not feeling it. Why would anyone want to acquire RIMM? Farley suggests some possible answers in his article. What do you all think?

    [ Edited: 22 June 2011 03:01 PM by FalKirk ]      
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    Posted: 22 June 2011 03:09 PM #1

    The only people who want to tussle with Apple are MSFT and Google. Google is eliminated and MSFT is tied to Nokia. Who is left to buy? RIMM is not done falling because the playbook was RIMM’s attempt to attack Apple and will not succeed. They do not have brand recognition, itunes, or pricing power. I don’t think Canada’s 30 million people can support their once proud company.

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    Posted: 22 June 2011 03:30 PM #2

    RIMM was attractive as a take over possibly last year but at this point all the momentum has already shifted away from BB’s and what market share they have left is quickly slipping out of RIMM’s reach.

    I still cant believe there are analysts that rate them as outperform with a $40 target.

         
  • Posted: 22 June 2011 04:51 PM #3

    Rimm is dying.  Please, do not resuscitate. Give them the last rites and let them fade away gracefully.

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  • Posted: 22 June 2011 05:58 PM #4

    I hate to sound like one of those people who says “Company XYZ is dying”, but seriously, I don’t think RIMM has much of a future and I see little to no value in buying them out. They have no particularly desirable products, and what little competition they offer right now is surely dwindling. In short, what’s the point?

         
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    Posted: 22 June 2011 07:16 PM #5

    It really feels like Palm all over again.

         
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    Posted: 22 June 2011 07:56 PM #6

    I hope you guys are listening to Horaces new podcast “Critical Path” on the 5 by 5 network - episode 2 was a great dissection of the Nokia & Rimm situation.

    Despite Rimms dire results warning - they still are growing units shipped on a
    Y-o-Y basis. unfortunately for them there ASP is dropping. They are growing well internationally, but their North American sales, where they were most dominant, is dropping.

    However the BBM system still gives them some protection from complete collapse, Palm & Nokia had no lock-in for users, whereas BBM is an anchor for some people to stay with blackberry. At least they are trying to continue the integrated model by developing a new OS and not jumping on the android/WP7 bandwagon.

    I still think that HP should buy RIMM, HP have a great smartphone OS in WebOS but no marketshare, whereas RIMM still currently has Marketshare + a killer messaging platform but has no decent smartphone OS yet. IF HP can quickly integrate the BBM messaging service with WebOS, then they could easily swing into a strong 3rd position in the platform rankings.

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  • Posted: 22 June 2011 09:35 PM #7

    iOSWeekly - 22 June 2011 10:56 PM

    I hope you guys are listening to Horaces new podcast “Critical Path” on the 5 by 5 network…

    Seconded.

    To make it easy for you all to listen and subscribe I’m providing a link, here. If you want to know more about mobile markets, this is the one podcast you must be listening to.

         
  • Posted: 22 June 2011 09:39 PM #8

    RIM would be smart to sell, but the co-CEOs have too much pride to admit they’re defeated.  The stock needs to go down more before there would be any buyer interest anyway.

         
  • Posted: 17 January 2012 05:02 PM #9

    FalKirk - 22 June 2011 05:58 PM

    Sean Farhy writing for seeking Alpha lays out the case for and against here at Has Research In Motion Bottomed Enough for a Buyout?

    Here’s a list of reasons why RIMM is in play:

    But I’m not feeling it. Why would anyone want to acquire RIMM? Farley suggests some possible answers in his article. What do you all think?

    Could the articles about possible RIMM discussions with Samsung account for its 8% pop today?  Frankly, I don’t see it.  The quality of the handset coupled with its ecosystem is the driving force to share.  RIMM has neither, ad I don’t see anybody matching Apple’s ecosystem for the simple fact that there are too many mobile OSs for developers to address.  Two, maybe three OS platforms will survive, but not the five or six we have now.

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  • Posted: 17 January 2012 05:04 PM #10

    Gregg Thurman - 17 January 2012 09:02 PM
    FalKirk - 22 June 2011 05:58 PM

    Sean Farhy writing for seeking Alpha lays out the case for and against here at Has Research In Motion Bottomed Enough for a Buyout?

    Here’s a list of reasons why RIMM is in play:

    But I’m not feeling it. Why would anyone want to acquire RIMM? Farley suggests some possible answers in his article. What do you all think?

    Could the articles about possible RIMM discussions with Samsung account for its 8% pop today?  Frankly, I don’t see it.  The quality of the handset coupled with its ecosystem is the driving force to share.  RIMM has neither, ad I don’t see anybody matching Apple’s ecosystem for the simple fact that there are too many mobile OSs for developers to address.  Two, maybe three OS platforms will survive, but not the five or six we have now.

    Could Samsung be interested just to get hold of RIMM’s patent portfolio?

         
  • Posted: 17 January 2012 05:16 PM #11

    And what else can they do? Microsoft has Nokia and Google will soon have Motorola. Bada will probably be a tough sell in much of the world, so as a manufacturer Samsung is in real danger of being the odd man out. Coincidentally Rimm is strong where Bada is not.

         
  • Posted: 17 January 2012 05:42 PM #12

    calvinav - 17 January 2012 09:04 PM

    Could Samsung be interested just to get hold of RIMM’s patent portfolio?

    I don’t think RIMM’s patent portfolio is worth RIMM’s current market cap.  If it was, the Blackberry wouldn’t be passing into obscurity.

    For me, the only real value would be positive, geographical, share match ups.

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  • Posted: 17 January 2012 07:08 PM #13

    FalKirk and Mark both back on the same day. Good to here from you guys. grin

         
  • Posted: 17 January 2012 07:25 PM #14

    Gregg Thurman - 17 January 2012 09:42 PM
    calvinav - 17 January 2012 09:04 PM

    Could Samsung be interested just to get hold of RIMM’s patent portfolio?

    I don’t think RIMM’s patent portfolio is worth RIMM’s current market cap.  If it was, the Blackberry wouldn’t be passing into obscurity.

    We don’t know if Samsung is pricing RIMM at even their current market cap. RIMM, internally, might be desperate enough to settle for anything. It is also possible that they might have some patents that they can’t use for lawsuits due to existing cross-license agreements, but might be useful for Samsung in their battle with Apple.

    Plus, in the current lawsuit environment, even somewhat relevant patents are being priced way higher than they might fetch otherwise. See Google paying an exorbitant price for a barely profitable Motorola.

    I am not saying Patents are the only thing on the table, but they would certainly be an integral part of negotiations.

         
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    Posted: 17 January 2012 10:30 PM #15

    Platon - 17 January 2012 11:08 PM

    FalKirk and Mark both back on the same day. Good to here from you guys. grin

    No, just an old thread.