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May 31, 2012

Last Months of Research in comMotion

Lack of market listening and poor product management have let RIM to the edge of abyss. The company has hired bankers to ‘to help evaluate its strategies’ and but in reality will be looking to sell. Unfortunately for RIM shareholders WSJ writes "There are a bunch of people [within RIM] that still don't understand how dire the situation is". I have written back in January 2012 that sale was the only option. RIM since has lost billions in market capitalization.

What RIM is really worth today?

·         Its hardware business worth nothing
·         Its BlackBerry OS worth nothing
·         Services business of servers global network is the best value and estimates vary between $2.75 and $4.5 billion
·         Patents may worth between $2 and $3 billion and is most liquid asset due to huge demand for intellectual properties in the mobile technology

Its market cap of $5.5B is around the value of those assets. An acquirer pays on average 35% premium and the price of between $7-9 billion would be reasonable. I expect next two month RIM to be sold

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