RIM stock price up 17% this week

Stock Talk
By Chris Umiastowski on 10 Aug 2012 07:37 pm EDT
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Wrapping up a week of BlackBerry stock activity fueled by rumors... 

Yesterday we saw a story from Bloomberg revealing that IBM had informally expressed an interest in Research In Motion's enterprise division.

The story is light on details. We don't know if there is any ongoing discussion between RIM and IBM. We have to assume that IBM is interested, or at least was interested, in the Waterloo firm's BES installed base as a way to compete against Microsoft in the enterprise market.

But still, despite the lack of detail, Bloomberg reveals important news. At least the market seems to think so. Bloomberg's story hit the wires well after market close on Thursday. And today, RIM stock is up more than 6%. In fact, the stock price has gone from just over $7 on Monday to $8.29 as I write this. That's a 17% move in a week.

Yet we need to remember that nothing has happened. There have been rumours of licensing BlackBerry 10 to Samsung, and Samsung has denied any interest (but of course they would). Now we have IBM rumours. But at least this time they're coming from a reputable news source, not an investment bank with a track record for pushing out questionable rumours.

We reached out to RIM for comment. As expected, they won't comment on rumours and speculation. They reminded us that their strategic review is still underway, and that when they have something to report to the public, they will. Until then, it seems we'll continue to deal with all sorts of stories. Heck, any well-capitalized business interested in mobile communications would be foolish to not poke around at RIM, given the publicly announced strategic review.

Why does something like this boost the value of RIM's stock? It all comes down to perceived value. All it takes is a little spark and some dry kindling to create a fire. RIM has been beaten down, left for dead, and has been treated as if nobody could possibly be interested in buying its assets.

I'm not saying RIM is looking sell themselves. At this point they probably are not, and RIM's CEO Thorsten Heins has made it clear that the company believes the best way to build value for shareholders is by bringing BlackBerry 10 to market. But the mere fact that someone as big as IBM could be interested in a big part of the company gets Wall Street excited. Hence the stock price increase.

I, for one, would prefer not to see Research In Motion sell its enterprise business. And I don't expect to get a lot of pushback on that statement. Without an enterprise business to market BlackBerry 10 to, the company would be launching its new platform with an even weaker positioning in the market. If RIM is to be sold, I think the whole company has to go. If it is to stay independent, I think asset sales are out of the question.

You fight, or you don't fight. But you don't sell chunks of your armor and some of your weapons.

53 comments

Bilaal

Agreed. And, it's good to see the stock price up, for as long as it lasts..

SurrealCivic

A lot of these rumors don't have any legs, this is because RIM is focused on launching BlackBerry 10. Like I said below, the only way I see them breaking up and selling parts is if their financials get critical.

Q2 FY 2013 ends for RIM on Sept 1st and they report on Sept 27th. We will get a glimpse of how much they are selling, shipping, how much money they are making and how much cash they are using.

Until then, 'buy on rumors', the earnings on the 27th of September will give us the necessary information and news to see if these rumors can pan out; if not, 'sell on news'.

_StephenBB81

I very much like the
"You fight, or you don't fight. But you don't sell chunks part of your armor and some of your weapons. "

That sums it up well,

I truly believe RIM is in it for the fight, and they don't need to sell their weapons to fund the fight

Blackberry_boffin

Well Reuters reports RIM is looking into selling NewBay and 'other assets' as a conclusion of their strategic review.
The waters are certainly muddy right now.

BruvvaPete

Speculators.com say Wendy's is gonna buy RIM. Gotta be true. NYT said so

SurrealCivic

The only way I see them selling parts of the company off before BlackBerry 10 launches is if their financials get critical. If their losses mount, cash starts disappearing and their ability to go forward and launch BlackBerry 10 is threatened.

I doubt they would be able to issue any debt at this time. I guess its possible but with a high coupon mainly due the future viability of the company and their ability to pay back their credit (ie. credit risk).

With the economy slowing down globally, it could be a tough several quarters for RIM. Smartphone shipment growth is the lowest it has been since Q4 2009. This could put pressure on them trying to sell BlackBerry 7 phones. Not only are consumers holding off on buying a new BlackBerry because they are waiting for BB10 but they are also holding off because they just have less money to spend (mainly due to inflation from things like food, energy, etc).

As for what will happen after BlackBerry 10 launches, that is a whole different game.

Thunderbuck

I sold my RIM stock today, basically because the jump in price didn't seem to result from anything that's actually likely to happen, so I don't think this price will hold.

I'm sure we'll be back to the low $7 range within the next two weeks and I'll gladly buy back in.

suzicat

Don't forget the patent infringement ruling against them was overturned in Federal court- $147.2 million. Stock was up 5% that day.
http://www.washingtonpost.com/business/technology/multimillion-dollar-ru...

pcguy514

1 buyout /positive rumor a week and they should be good till BB10 launch... Jks

Shadberry Bold

Amazon is looking for traction in the mobile IP sector. It would be a great if not perfect match for them to acquire RIM. I would love to see that happen.

#blackberrybychoice

BruvvaPete

Amazon? What's that? Some Yahoo?

G-bone

Screw Amazon, go RIM!
"Step back non-believers or the rain will never come..."

fiq.fendy

Howabout RIM acquire Amazon instead? :D

Via PlayBook 2.0 64GB with Bold 9900

iseeblackberry

You fight, or you don't fight. But you don't sell chunks of your armor and some of your weapons.

AMEN!

Pard

Okay so I have been at a golf outing and am a little hammered. The power of Vodka. So forgive me for rambling but the way I see it is BlackBerry does not have the resources to compete against the tech gorillas. They need to partner with AMZN or IBM. or my long shot is YHOO. They have great technology and great assets but they do not have the scale in manufacturing and marketing. This is no fault of the current team. They are playing the hand that they were dealt. Partnered with AMZN they would dominate the enterprise with security and storage offerings. AMZN media content powered by BB10 would give the partners control of their destiny and be a force in the consumer space. Of course BlackBerry needs to deliver a sexy BB10 product.

Partnered with IBM and Lenovo in enterprise would be compelling.

My preference is AMZN. They could call their mobile assistant Q, Star Trek NG and cut a deal with Paramount to feature their devices in their movies and music videos. AMZN could make BlackBerry very very cool again. They have the content and the marketing resources and they are the only tech gorilla without a propriety mobile platform. That makes sense to me.

In any event, BlackBerry needs to leverage their assets and create shareholder value and confidence. I would like to see an event that would raise, 2B of cash and do a massive buyback of stock that would reduce the public float, essentially take the company semi private and take out the shorts. Long term shareholders could hold their positions and ride the new wave.

BlackBerry is in play, they have two top shelf Investment Bankers on the case. I just hope we get a chance to participate in the upside.

Thunderbuck

Amazon would be a great media partner for RIM. If they wanted to give up on international markets and just sell in the US (Amazon's offerings outside the US are pitiful).

Shadberry Bold

Seems like peanut butter and jelly to me. They would compliment each other in the areas that they are weak. Amzn will give bb the leverage it needs in the u.s. and blackberry international strength would give Amzn and uptick globally.

Thunderbuck

You miss my point. The only distribution rights that Amazon has shown any interest in securing are US rights (except for e-books, admittedly).

It would take Amazon years to secure music/video distribution rights in all the other countries Blackberry sells. Otherwise, their content is useless to those customers.

BruvvaPete

I stopped read g after you said you golf drinking vodka. People golf drinking beer.

G-bone

I will golf drinking Fine Kentucky Bourbon, or I will golf no more!

panterarck

I don't golf....I just drink vodka.

BruvvaPete

Brilliant! Lmfao. That made my Sunday. Wait. Which day is it?

Superfly_FR

... Provided it's no lager! Wisk(e)y or tea.

veeru789

Partnering (and not selling part or full) with Amazon might be a good option. Amazon has the content and RIM has the tech. But selling parts or full should not be considered. They have a great product that can go beyond smartphones. If RIM could structure a deal which is a win win for both Amazon and RIM by partnership would be great. But again, I stress, they shouldn't sell any or whole of the business. I don't think any other buyer will carry forward the vision for present RIM.

#Blackberrybychoice
#BlackBerryforlife

kemj

Partnership, yes. Sell, no. Simple.

STAY OPEN TO POSSIBILITIES. BE BOLD.

lorax1284

I put all of this talk into a little box labelled "governance". It would be irresponsible, given RIM's share price and market analyst comments, if the board did NOT investigate EVERY reasonable possibility, even if only to have a third-party consultant / investment analyst rule out the bad options.

I took Thor saying "we considered android" in the same manner that I considered dying my hair blonde. I thought about it, but OH, God, NO!. Ech!. No!. Nothing against blondes, but just not for me.

It makes me sad to think what drives RIM's share price is speculation that something terrible i.e. selling assets, selling business units, outright buyouts, is imminent. There is no scenario aside from releasing BB10 and executing the go-to-market strategy that even makes sense to me. Everything else is pointless.

I worked for a business unit of a company that just was not interested in the line of business, and rather than sell the technology, they just shut the company down. It's great technology that could really have made an impact, but the owners just couldn't be bothered... the corporation was too huge to care about a few million dollars, so they just shut it down. There are many stories like that in tech, notably the Cisco / Flip camera "debacle"... but I can't see any sale of assets or breaking up RIM along "business unit" lines having any other effect than "could the last one out turn out the lights?". :-(

...but that's just w.r.t. share price. I'm #Blackberrybychoice unless RIM has totally gone, and a decent competitor comes out with a portrait QWERTY slider with a trackpad and decent one-handed operation, and a decent OS that doesn't crash out of it's mind or just drive me mad with user interface idiosyncrasies... but the way Android and Apple are going, I guess I have say (with a grimace) "Goooo Microsoft! Yay, Windows Phone!" (shudder)

marko868

Be smart and sell before stocks drop again or at least license BBM or BES

Darlaten

So this is not to be negative, but assuming the raise in 17% is strictly due to speculation rumors regarding Samsung and IBM, rumors which have been denied by the respective companies, are we expecting that the stock will drop 17% on Monday when investors/speculators realize that Samsung and IBM are not going to be buying RIM?

THBW

Yes, there has been a bit of a bump in the last week or so. Of course, the question is why. It is easy to say that it is some short term factor. But then again, it might be something else. The influence of BB10?

Shadberry Bold

I would say it's in relationship to the former. BB10 is too far away to jocky a 17% uptick within the last week or so. If it were the case we would see more rallies on the news of Apple iOS updates and iphone 5 ahead of launch and press releases. More over apple stock is much more valuable than RIMM stock and early triggers for platform enhancements just isn't the cause of 17% rallies. ******Speculation****** of a merger or takeover has been the catalyst. If an acquisition is made I would expect a larger percentage of change on more definitive news for RIMM.

Jimcmf

I agree with you Kevin.

Today was Frosh day at McMaster University in Hamilton, Ontario.
99 % of the students there had BlackBerrys.
So what gives? I see BlackBerrys all over the place. People are talking like they are nowhere to be found. Actually, this coming week, 2 new employees get new BB Bold 9900.

They are awesome

darkrunner

I agree with one of the previous posters. I love BlackBerry, but if they want to stay in the game long term against the giants, they are going to need an ally. Amazon makes the most sense in my mind, but we'll have to wait and see.

Perjade

The stock went up because of the rumors regarding IBM and Samsung ! Nothing else! :(

Puz_zled

Winning back $150 million doesn't count for ANYTHING??!!
BlackBerry by Choice

joshua_sx1

Good for RIM... guess, there is no reason at all to delay the release of BB10...

Slash82

There are a lot of trolls out their.
And many people who say that RIM is dead or something like that.
And it's true that RIM had the hardest time in company's history.

But it was their own fault to stop "real" innovating - they cooked up too long "old" products. That was a big fail in the fast changing high-tech industry. So they paid a high price for that.

But I'm confident.

When you look at RIM's big competitors like Apple and Android devices.

Apple is going to make the same mistake as RIM did, they are starting to rest on their success. IMO iOS 6 is going "only" going to be a updated iOS5, which was a updated iOS5 etc.
People are getting bored because of that.
And when you look at the Iphones, almost all the same, just with updated hardware.

Also many people jumped to Android, not because it so awesome. The just got "more" for their money, like HTML5 browsing etc.

I'm really sure, many of Android users will come back to Blackberries with OS10.
And I also believe that many iOS users will jump to Blackberries, because Apple is getting to boring.

Maybe not in right away in 2013, when the first BB10 will be released, but some monthes after that! This will be a process, that will take a while!

Biggest challange for RIM will be to fill their AppWorld with Apps people really wanna have, like Skype or netflix.
But the new basis OS is awesome!

IMO RIM passed their lowpoint.
They are on a good way!

BruvvaPete

Not enough +1s for that post. Only thing I would add is them dropping the ball in order to try and buy an NHL franchise (instead of focusing on innovating their business).

tonyrenier

Since becoming a Really BIG stockholder of 100 shares I have monitored Yahoo Finance, as advised by a banker, supposedly the most up to date Site. I have learned that the stock market is ruled by emotion more than fact. Of course I am a huge supporter of RIM, however I have seen the reaction of traders when the rumors, based on nothing fail to materialize.
Actually, I'm discovering that this is how Wall Street works! These "anal-ysts" are controlling our 401Ks!
Needless to say, I not only have concern for RIM but for the future of our economy.
Sorry to add such a grim, but what I believe to be accurate observation.

Nick Shadow

Tony,

Those guys on the boards are not driving anything, and while there are some very large momentum traders, they aren't posting what they are doing and why.

Also, there are many large funds, hedge, mutual, etc. that are run by very sharp people who do lot of research and planning, they are the real movers.

I suggest you stream live on Bloomberg a few days, they interview many of the best and brightest. It might provide a slightly different perspective.

kyleo92

So this hike isn't anything to do with the release of the 4g LTE Playbook and them winning the appeal regarding the patent infringement which would have cost them $142.7m??

timmy t

I would appreciate the stock staying at $7 until I have bought what I want.

Nick Shadow

Perhaps the bump comes from the stock being massively oversold. Fear of going out of business, rumors, missteps and mishaps have all piled on.

However, everyone in market has been watching; now that it feels like someone is driving the business, keeping commitments, addressing the market and the public in a reasonable and professional manner, opinion shifts from "they are a train wreck and toast" to "they may have a story to tell, and be able to execute", big difference to the market.

The two previous, nut job Co-CEO's really screwed the pooch, they blabbed off-handily about things just to supply answers. But I think the single most damaging thing they did was tell the public and the market that BB10 was coming soon, when they clearly knew it wasn't, they were just trying to dodge the heat. What they did do very effectively was freeze current sales, then the numbers went to hell because everyone was waiting for the new gear and spiral continued. Then the second major thing was bringing out the Playbook about a year before it was finished. Management, or the lack there of, makes a hellava difference!

I watch this company VERY closely, and about 2 months after Thor took office I began to see subtle, positive differences, they continue and are building.

Finally, stocks move all of the time on rumors, but, and this is important, by evaluating the quantity, quality, and source of the rumors you can make an educated guess that something really is happening. Oh, and everyone denies everything until something is done. I am long RIM

Nick

THBW

I think you have hit the nail on the head. Thor as the CEO was an excellent move. He has a clearness of thought and more importantly discipline. Lets face it, it is not pleasant standing in front of shareholders and telling them about RIM's problems and how it will take years to fix. The good news is that he resisted slapping together a half assed product and throwing it into the market.

I too watch RIM's moves and statements very closely. I think Thor has been very carefully orchestrating every move. Delaying the handset release to 2013 was in part strategic. RIM wants to highlight the fall playbook launch for a reason. My bet is that BB10 will make the 4G playbook a fully functional communication device. If so, it blurs the line in the mobile communication field and repositions RIM as a technology leader. Further, by placing the BB10 launch after the mini iPAD release, you create the eye catching contrast that the media will pick up on. So it works from a marketing perspective. Of course, it is all rumors and best guesses at the moment.

Blackberry_boffin

It indeed all adds up to a slow realization all is not so bad.
The growing sentiment that iOS6 and Jelly Bean are not as extensive game changers as everyone thought they would be and the gradual discontent with the forced transition btwn Win7 to win8 is making people look at everyone else. WP8 still looks like WP7, so little threat from there. The iPhone 5 will have to be monstrous to shock everyone and the general feeling is it will find it tough to overhaul the SG SIII which has not broken any records itself.
A couple of notably savvy investors have thrown their weight behind RIM recently and a closer look still suggests RIM is undervalued. The results of the long-running strategic review is about to be made public and no one is sure what they will bring up. This makes everyone take a closer look at them and realize at current stock levels it hard to lose money on RIM.
Remember the iPhone 5, Jelly Bean handset, WP8 devices are all launching in the same quarter and cannibalizing each other (the iPhone will probably win) but few realize contracts dont end in one quarter. So a clean, uncontested launch could give BB10 a good launch. If some licences it the better. So BB10 only has to be functional to maintain RIM's current sales levels at the least.
Fact is you just cannot lose.

marko868

RIM hasnt "Innovated" since os 5

richardgere

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