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Though Research In Motion (RIMM +6.3%) bounced on a report IBM is interested in its data...

Though Research In Motion (RIMM +6.3%) bounced on a report IBM is interested in its data services arm, many are skeptical RIM, which reportedly wants to wait until BB10 ships before making sale decisions, will agree to unload the business, estimated to be worth $2B (~$4/share) by some. "It would be like removing one of your most important organs," says a Frost & Sullivan analyst. Fair enough, but how much is the rest of the body worth at this point? Update: The WSJ reports RIM is looking to sell its NewBay mobile content unit, acquired last year for $100M. Chances are they'll take a loss.
Comments (6)
  • eieio
    , contributor
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    Fair enough, but how much is the rest of the body worth at this point?

     

    How much is $2 Billion cash, no debt , a deep Patent protfolio and 70 million users worth?
    10 Aug 2012, 04:22 PM Reply Like
  • SA Editor Eric Jhonsa
    , contributor
    Comments (738) | Send Message
     
    By "the rest of the body," I'm referring to the hardware business, which Bloomberg claims no one has shown interest in buying. The Frost & Sullivan analyst was suggesting RIM needs to hold onto its services business to support its hardware (though I think they could work out a deal with a buyer to make sure BlackBerry users aren't disrupted).
    10 Aug 2012, 04:25 PM Reply Like
  • billboos
    , contributor
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    With RIM's stock value of about $4 B. IBM should buy the whole co. and not only get the secure server centers and intellectual property but a major play in mobile which is where everything seems to be headed. IBM could bring resources to BB10 and speed up development and leverage relationships with ATT and other carriers to market it not only as a handset but secure front end to mobile apps. This will drive big data and lucrative services contracts for application management and cloud delivery by offering end to end solutions. May be an out- of- the- box thought but worth consideration.
    10 Aug 2012, 05:01 PM Reply Like
  • Herr Hansa
    , contributor
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    A look at major shareholders positions in RIMM means a hostile take-over would be unlikely. On a buy-out, it is extremely rare for a company to sell at their current market cap. More likely RIMM would sell near book value, or much closer to 19.00 a share.

     

    Service margins are far better than hardware margins. Now with service revenues near 1/3 of total revenues, it would kill RIMM to split out that segment, then lease back the services to run the hardware. Remove the high margins and go to lower level hardware margins might sound good to IBM, but it would be like pulling the heart or brain out of RIMM.

     

    It doesn't make sense that investors are rushing into shares based upon this IBM rumor. What makes more sense is that worries about similar moves are causing some to try unloading short positions. Short interest is still extremely high in shares of RIMM, which causes exaggerated moves.
    10 Aug 2012, 08:57 PM Reply Like
  • slickvguy
    , contributor
    Comments (498) | Send Message
     
    Thank you for writing a sensible post re: RIM. Unfortunately, one of the very few I have read. You made a number of very good points and I agree with each of them.
    11 Aug 2012, 04:23 AM Reply Like
  • bedrock65
    , contributor
    Comments (637) | Send Message
     
    RIM has already booked the losses on their acquisitions, goodwill has all been written off.
    10 Aug 2012, 10:00 PM Reply Like
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