Bloomberg reports that
Research In Motion Ltd. (RIMM) has lost so much value that an acquirer could pay a 50 percent premium and still buy the BlackBerry maker for a lower multiple than any company in the industry.In other words, it can be gotten for bargain-basement prices.
RIM, once worth $83 billion, fell more than 80 percent from its record three years ago as Apple Inc. (AAPL)'s iPhone and Google Inc. (GOOG)s Android platform siphoned off smartphone customers. The Waterloo, Ontario-based company, which plunged last week after saying quarterly sales may drop for the first time in nine years, closed yesterday at $25.89 a share, or 4.7 times earnings next year. That's less than any communications-equipment provider, according to data compiled by Bloomberg.
Scott Sutherland at Wedbush Securities Inc. in San Francisco told Bloomberg that purchasing RIM would bring "critical mass" to Microsoft in the smartphone market.
Buying RIM would make plenty of sense for Microsoft. With the purchase of RIM, it could have two separate smartphone lines, one for business (RIM), and one for consumers (Windows Phone 7). Given Microsoft's deal with Nokia, it would have either own or have deals with two of the largest phone manufacturers in the world.
I don't expect Microsoft to purchase RIM, though. One issue is that Microsoft seems wedded to a Window-everywhere strategy, and RIM doesn't fit into that. Still, buying the company would be a quick way for Microsoft to immediately become a much larger mobile player.