Anyone out there considering RIM plays?
I keep thinking it's inevitable to see it taken over, for it's patent portfolio and remaining customer base.
RIM takover/bankruptcy plays?
By Vicente Follow Thu, 28 Jun 2012, 11:02pm 997 views 7 comments
In Davis CA 95616
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I shorted it on the Motley Fool, but not for real. It tanked 15% or more this morning.
Maybe HPQ will take it over. Then both companies can go bankrupt together!
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That's the catch about RIMM. It will get acquired eventually. However, at what price and when?
RIMM has a book value of $18/share, and it has $3.70/share in cash with no debt. It went from making $3.4B in 2010 to making less than $1.2B in 2011, and its profit is shrinking fast.
If, and that's a huge if, RIMM can turn itself around in the next 2-3 years like AAPL did in the early 2000, it will give you a very handsome return. Personally, I think AAPL is done with its innovation in a year or two now that Steve Jobs is gone. So the mobile market will be up for grab again. Can RIMM reinvent itself?
It's a speculative play at this price. Like PALM, it may drop to $4-$5 before it just sits there & waits to be acquired. However, RIMM 's balance sheet is much much better than PALM. At this price, there is some minor risk to the down side in my opinion. At $5/share, I will likely buy 1,000 to 2,000 shares & forget about it for several years.
Just my 2 cents. :o)
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I don't see them creating anything that will make them more profitable, at least not in the space they are in now. Cell phone market is very saturated, a lot of very strong competition there.
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FortWayne says
As I mentioned above, they have to reinvent themselves, or the company is going into the toilet. They have almost $2B in cash with no debt so they can definitely try to do a lot of reinventing. Can't just let the company go down the tube without a fight right?
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E-man says
They will likely dump the hardware business and license their software. There's still money to be made but the company will have a lot less employees working there.
if they do sellout, someone will buy them at a fairly decent price if only for the patent portfolio.
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My strategy is this: I bought it at $40, watched it more than double and rode it down to where it is now. I don't have a long-term strategy except to wait for it to be bought. :)
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E-man says
I'd hope so. History isn't on their side, I've seen too many tech hardware giants turn into nothing over years when they stopped innovating, and couldn't recover when they tried.
I remember when I had my first film camera by Eastman Kodak. They were so popular back then. And today they are a mere shadow of their past. http://finance.yahoo.com/q?s=EKDKQ&ql=1
I think the most likely scenario for RIM will be to sell to another giant, but I do hope they innovate and create something exciting for this world instead.