This Is, Suprisingly, A Logical Way Out For $RIMM
Oddly enough, after all of the fumbling around, the news broke yesterday that Amazon was looking at Research in Motion. What would this accomplish? Amazon could buy a handset maker, for cheap. It already has the obvious marketing platform to sell whatever to whoever. At this point, selling the handset business to Amazon makes sense, but only if done SOON. Market share of Blackberries is plummeting, and before the handset is entirely obsolete, RIMM needs to sell. Ask Palm what happens what happens when this occurs too late.
Sell the Enterprise Division
With the unwanted stepchild (Blackberry handsets) sold, the Enterprise division which includes the secure email network still favored by corporations can be sold to a company that is dedicated to business computing. Microsoft, Oracle, IBM, take your pick. Microsoft, in particular can attach this to its entrenched servers, and there it makes sense.
Patents? Auction.
The value investor crowd has speculated that the RIMM patent portfolio is valuable. This blog has been highly skeptical of this. That said, let the open market decide, and get a price. The worst that can happen is that the patent portfolio can be included in the sale of the Enterprise division.
A+B+C > 14? Probably, But Timing is Key
RIMM management has no time to lose. The reason? Market share falling, and corporate customers are exploring how to integrate iPhone into corporate networks. RIMM management cannot, by itself, stop the rot. This erosion is time dependent, so a split-up and a sale needs to happen, and the sooner the better for RIMM shareholders.
Disclaimer: After being short from the 30s, the author is the smallest long imaginable at 13/share.
No comments:
Post a Comment