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Research In Motion (RIMM) shares are halted after the company provides a business update in...

Research In Motion (RIMM) shares are halted after the company provides a business update in which it says it has hired JPMorgan and RBC to assist with a "strategic review" that will cover licensing and partnership opportunities, and "strategic business model alternatives." A prior report claimed RIMM was leaning towards hiring JPM. RIM also says it expects to report an operating loss for FQ1 (ends June 2), citing both lower volumes and tough pricing - analysts currently expect EPS of $0.43.
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Comments (16)
  • Herr Hansa
    , contributor
    Comments (3080) | Send Message
     
    The 10.00 barrier was broken. Still very little options activity under that. Caution advised in either direction.
    29 May 2012, 04:42 PM Reply Like
  • Teutonic Knight
    , contributor
    Comments (2061) | Send Message
     
    A strategic review with no sale; how about a private equity investment (http://bit.ly/Jz0tmL)? The few insiders/founders now hold about $2B out of the present ~$5B market valuation.

     

    A stake sale to the Ontario Provincial Gov't, the Federal Gov't (less likely with the Conservative Party), and other large Canadian public and private pension funds, would easily make up the rest, too.

     

    The fact JPM is involved I read it that U.S. investors are also welcome This would be a prudent move to escape the burning speculative fervor.
    29 May 2012, 05:28 PM Reply Like
  • Herr Hansa
    , contributor
    Comments (3080) | Send Message
     
    I would look back at rumors earlier this year based upon visits to RIMM headquarters by LG and Samsung. Thought LG might have been a supply issue, since we don't know what screen will be in the BB10 device, if we look at the manufacturing ability of Samsung, it is not too much of a stretch to consider some licensing arrangement.

     

    I'm just glad it's not Morgan Stanley involved. All the talk about a rumored Facebook phone would be a terrible connection. JPMorgan are not likely to want to appear bad in this activity with RIMM.
    29 May 2012, 05:48 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    TK

     

    I agree get this thing out of Canada or die! I am thinking we will see a tech company step up. PE can see opportunities they just have a hard time leveraging tech companies.
    29 May 2012, 08:13 PM Reply Like
  • Teutonic Knight
    , contributor
    Comments (2061) | Send Message
     
    TVP,

     

    I agree too. Waterloo, Ont. is a quaint town and some Canadian folks love it like a cult. Rim is a backyard and hotbed of the U. of Waterloo (UofW), or vice versa, lol. The principals of their subsidiary Certicom Ltd. are UofW professors who developed the elliptic curve algorithms, 26 of which are licensed for use to the NSA. So even if U.S. immigration would expeditiously issue a few thousand green cards, I wonder how many of the key technical folks would just relocate, and to where?

     

    Just my 2 cents. Enough said, off my box.
    29 May 2012, 08:56 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    TK

     

    I think where they are getting killed is just a lack of exposure to the outside world and what is going on that they need to keep up with. Silicone Valley is moving too fast for them and they are out of the mainstream so they are falling behind. IBM had great minds too but got their lunch eaten by people working out of a garage.

     

    Time to grow up and compete versus rest on laurels and big man on campus lifestyles.
    29 May 2012, 09:29 PM Reply Like
  • sreimer77
    , contributor
    Comments (241) | Send Message
     
    IBM? Have you seen their stock, earnings, revenue growth, margins? Not sure what your referring too, but IBM owns technology.
    30 May 2012, 11:07 AM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    LOL. I must be older than you. I was thinking of the move from mainframes to PC's which IBM totally missed. And they had the best minds in research but got their butts kicked and almost went out of business.
    30 May 2012, 11:37 AM Reply Like
  • WisPokerGuy
    , contributor
    Comments (887) | Send Message
     
    I've said it before and got absolutely HAMMERED for even making the suggestion...

     

    RIM = RIP
    29 May 2012, 08:08 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    Wis

     

    Give me your case. I won't hammer you for a good case.
    29 May 2012, 08:14 PM Reply Like
  • Herr Hansa
    , contributor
    Comments (3080) | Send Message
     
    Agree with TomasVP. If you make a good case, then no reason to hammer anyone. Just remember they are not borrowing money now, and they have no debt.
    30 May 2012, 01:09 AM Reply Like
  • Bouchart
    , contributor
    Comments (780) | Send Message
     
    Facebook will buy out RIM to make their new Facebook phones. Then their shares can race towards $0 even faster than before.
    29 May 2012, 11:10 PM Reply Like
  • sreimer77
    , contributor
    Comments (241) | Send Message
     
    Cant go to zero. No debt, they can pay off all liabilities and still have net cash of 2.1billion, excluding inventories. Add patents, property, plants and equipment valued well over 6billion. Please correct me if I am wrong, but has any company voluntarily gone bankrupt? Normally they go bankrupt if one cannot meet its long term debt obligations, hence Greece. So sorry to say, its not going to happen.
    30 May 2012, 11:57 AM Reply Like
  • Teutonic Knight
    , contributor
    Comments (2061) | Send Message
     
    sreimer77,

     

    Well, theoretically it can, if the company continues to operate at a loss for a protracted period. There are mouths to feed, capital expenses, maintenance, customer support, bank loan interests, and other cost. There is a thing called 'burn-rate', the daily burn in cash. Then zero, then negative.
    30 May 2012, 12:25 PM Reply Like
  • Herr Hansa
    , contributor
    Comments (3080) | Send Message
     
    One analyst actually factored the cash burn rate as $500million annually, but noted cost savings could lessen that amount. Even at that rate, with no changes at the company, it would take more than four years to burn through all available cash, without considering any asset nor patent sales.

     

    The share price is near 2003 levels, when RIMM had about 540000 (thousands, not millions) of users. They now have, at last report, 78million users on their system. They were profitable in 2003.
    30 May 2012, 01:24 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    HH

     

    That is what I am looking at also. The rhetoric is lights out but the reality looks like this is a possible double bagger if they get their act together.
    30 May 2012, 02:23 PM Reply Like
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