January 23, 2012 RIM announced drastic changes. Or not. Double-headed CEOs Mike Lazaridis and Jim Balsillie resigned but remain on the board or directors. New headman, Thorsten Heins said he will focus on rolling out the new products “the company doesn't need seismic change”.
They might as well could have kept the pair running doomed ship into the iceberg.
RIM’s ship is sinking and the crew is in denial. Denial road will be painful for the shareholders as Apple, Google and Microsoft will be eating up Blackberry market share. There are only two choices left for RIM to salvage what is left of its value:
Above mentioned transformation will be difficult to execute. For the shareholders the best option is to sell the company to HTC. HTC has long been foolish enough to look for own an mobile operating system. Samsung, the main competitor owns BADA, proprietary mobile OS, and is working with Intel to run it on its chips. Google’s acquisition of Motorola Mobility made Android OEMs nervous about directly competing with Google who will be in the business of making phones for its own OS. HTC now is more opened to talk with Blackberry. With RIM share price in a freefall, a buyout can be the best option as usually the acquirer pays on average 35% premium over market price.
What RIM is worth? RIM market cap is $7.8 billion. Considering acquirer pay on average a premium of 35%, HTC would need to come up with $10.5B.
Can HTC afford to buy RIM? Looking at HTC ballance sheet the company has $3.5b in cash. Considering the company is not leveraged they should be able to finance 80% of the purchase. Or paying in stock is much better option
Financial Times wrote Thorsten Heins, RIM’s new chief executive, tried to damp down further speculation that RIM might ultimately be forced to sell out to a rival or become a takeover target for industry outsiders or private equity.
They might as well could have kept the pair running doomed ship into the iceberg.
RIM’s ship is sinking and the crew is in denial. Denial road will be painful for the shareholders as Apple, Google and Microsoft will be eating up Blackberry market share. There are only two choices left for RIM to salvage what is left of its value:
- Sell the company
- Adopt new operating system
Above mentioned transformation will be difficult to execute. For the shareholders the best option is to sell the company to HTC. HTC has long been foolish enough to look for own an mobile operating system. Samsung, the main competitor owns BADA, proprietary mobile OS, and is working with Intel to run it on its chips. Google’s acquisition of Motorola Mobility made Android OEMs nervous about directly competing with Google who will be in the business of making phones for its own OS. HTC now is more opened to talk with Blackberry. With RIM share price in a freefall, a buyout can be the best option as usually the acquirer pays on average 35% premium over market price.
What RIM is worth? RIM market cap is $7.8 billion. Considering acquirer pay on average a premium of 35%, HTC would need to come up with $10.5B.
Can HTC afford to buy RIM? Looking at HTC ballance sheet the company has $3.5b in cash. Considering the company is not leveraged they should be able to finance 80% of the purchase. Or paying in stock is much better option
Financial Times wrote Thorsten Heins, RIM’s new chief executive, tried to damp down further speculation that RIM might ultimately be forced to sell out to a rival or become a takeover target for industry outsiders or private equity.
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