alertmeipp Posted May 30, 2012 Share Posted May 30, 2012 How can ppl in RIMM concentrate with the "major" layoff over hanging their heads? Link to comment Share on other sites More sharing options...
CONeal Posted May 30, 2012 Share Posted May 30, 2012 A natural fit could be AMZN, who could pay with overpriced stock and gain a platform that would help defend its share of content distribution and generate more use of its AWS services. Of all tech companies out there, I think AMZN has the best chance of actually competing against the big three OS providers (AAPL, GOOG, and AMZN), and buying a platform like BB10/QNX could make it into a real contender. Amazon showed interest last summer in the company but management wanted to correct the problems themselves. Link to comment Share on other sites More sharing options...
txlaw Posted May 30, 2012 Share Posted May 30, 2012 A natural fit could be AMZN, who could pay with overpriced stock and gain a platform that would help defend its share of content distribution and generate more use of its AWS services. Of all tech companies out there, I think AMZN has the best chance of actually competing against the big three OS providers (AAPL, GOOG, and AMZN), and buying a platform like BB10/QNX could make it into a real contender. Amazon showed interest last summer in the company but management wanted to correct the problems themselves. Yup. Link to comment Share on other sites More sharing options...
Liberty Posted May 30, 2012 Share Posted May 30, 2012 How can ppl in RIMM concentrate with the "major" layoff over hanging their heads? I would expect that the morale at the company is pretty low right now. That doesn't help. Link to comment Share on other sites More sharing options...
portfolio14 Posted May 30, 2012 Share Posted May 30, 2012 From yesterday's RIMM's Business Update: "Our global subscriber base continued to grow this quarter to approximately 78 million, driven primarily by growth in international markets, which is partially offset by high churn in the United States, and our BBM user base has grown to approximately 59 million users globally." Can someone enlighten me the difference between "78m global subscriber base" and "59m BBM user base"? If a subscriber is not a BBM user, what are they subscribing to? Link to comment Share on other sites More sharing options...
eclecticvalue Posted May 30, 2012 Share Posted May 30, 2012 How can ppl in RIMM concentrate with the "major" layoff over hanging their heads? I believe incentive is to see who will work very hard in order to keep their job. Overall I think it is a bad policy and the same thing is going on in HP. IMO they need to change the culture so RIMM will be more innovative. Similiar to google's culture IMO. It may sound naive. At this point will RIMM be attractive to have a position in since there is possibility of buyout talks? Link to comment Share on other sites More sharing options...
SharperDingaan Posted May 30, 2012 Share Posted May 30, 2012 The smartest thing they can do is put a value on this dog, & take it private. As quickly as possible. Link to comment Share on other sites More sharing options...
Liberty Posted May 30, 2012 Share Posted May 30, 2012 The smartest thing they can do is put a value on this dog, & take it private. As quickly as possible. But would they get better results as a private company? It's not my impression that the public nature of the company is what pushed them in the wrong directions. Link to comment Share on other sites More sharing options...
alertmeipp Posted May 30, 2012 Share Posted May 30, 2012 How can ppl in RIMM concentrate with the "major" layoff over hanging their heads? I believe incentive is to see who will work very hard in order to keep their job. Overall I think it is a bad policy and the same thing is going on in HP. IMO they need to change the culture so RIMM will be more innovative. Similiar to google's culture IMO. It may sound naive. At this point will RIMM be attractive to have a position in since there is possibility of buyout talks? this will kill all the team work spirit required in innovation. Link to comment Share on other sites More sharing options...
Parsad Posted May 30, 2012 Share Posted May 30, 2012 From yesterday's RIMM's Business Update: "Our global subscriber base continued to grow this quarter to approximately 78 million, driven primarily by growth in international markets, which is partially offset by high churn in the United States, and our BBM user base has grown to approximately 59 million users globally." Can someone enlighten me the difference between "78m global subscriber base" and "59m BBM user base"? If a subscriber is not a BBM user, what are they subscribing to? Not everyone uses BBM. So they have a total of 78m subscribers. Of that, 59m utilize BBM...meaning there is 59m users that have an inherent or intangible value...you could exploit that customer base through advertising texts, offers, service fees, etc. Thinking in those terms, that's about 4-5 times the total number of cell phone users in Canada, so you have to figure that network is worth at least $5-8B in value...another $5B minimum for the patents...another $2B for the actual corporate office, including real estate, cash & receivables, equipment, staffing, technology, etc. So a very basic sum of the parts analysis says RIMM is worth $12B-$15B. It's trading at half that, so there is some value there. Now if you assume that erosion in the core business negates the $2B value of the corporate office, since the business is dying in North America, it is still relatively cheap, and the margin only widens as it falls to $5 a share. It goes to $5, and I guarantee it will get acquired. Cheers! Link to comment Share on other sites More sharing options...
prevalou Posted May 30, 2012 Share Posted May 30, 2012 I'd like to know how you can value the patents at 5 B$ mini, what your criterias are, thanks in advance. Link to comment Share on other sites More sharing options...
Uccmal Posted May 30, 2012 Share Posted May 30, 2012 The smartest thing they can do is put a value on this dog, & take it private. As quickly as possible. But would they get better results as a private company? It's not my impression that the public nature of the company is what pushed them in the wrong directions. I agree with both of you. It wasn't being a public company that screwed them up. Going private, either as Rimm with larger private investors, or under the umbrella of another company, will get them out of the line of fire, so they can concentrate on business. I cant imagine anyone is finding it easy to focus in the current situation. As to the value of the company I cant assess it anymore. The BBM business is in serious trouble with Whatsapp, FB, and others. The patent portfolio is an unknown. I wouldn't go on past pricing. $5 per share would certainly cover your ass though, but I thought that at 20, 30& 40, while business steadily collapsed. The sale of Rimm could be quite complex... There is government concerns to deal with... So hiring an investment bank is the smart option. One scenario that comes to my mind: 1) Virgin mobile with FFH, and others as partners. Virgin has been a fringe operator in the carrier business. This would give Rimm stability and Virgin an immediate carrier expansion. Link to comment Share on other sites More sharing options...
DCG Posted May 30, 2012 Share Posted May 30, 2012 Being a public company has nothing to do with their problems. They simply stopped innovating and got left in the dust by competition. Link to comment Share on other sites More sharing options...
rmitz Posted May 30, 2012 Share Posted May 30, 2012 Not everyone uses BBM. So they have a total of 78m subscribers. Of that, 59m utilize BBM...meaning there is 59m users that have an inherent or intangible value...you could exploit that customer base through advertising texts, offers, service fees, etc. How about, instead of "exploiting" their customers, they try to provide a superior value and an excellent service? Oh, right, they failed at that, so now they basically have to put themselves in runoff by exploiting people and driving them away faster. I am not entirely flip here. This would, if anything, increase their rate of decline. Link to comment Share on other sites More sharing options...
txlaw Posted May 30, 2012 Share Posted May 30, 2012 Taking the entire company private ASAP would be a huge mistake and would only benefit people who are out to make a quick buck on M&A or potential PE acquirers who will break the company up anyway. The parts of RIM just don't work properly together, and there is a lot of room for optimization of these assets, especially by partnering with bigger players. The benefit of optimization should accrue to the public shareholders who are not short term thinkers. Agree with rmitz's distaste with exploiting the customer base through texts, offers, service fees, etc. That would not be optimization of the assets. Link to comment Share on other sites More sharing options...
Guest valueInv Posted May 30, 2012 Share Posted May 30, 2012 After giving it a bit more thought, you wonder if Qualcomm would bid in a Google/MSFT/AAPL consortium as well. INTC recently spent money on security software(McAfee - $8Bn) and phone hardware(Infineon) being the latest examples but I wold guess INTC lacks the patent portfolio depth of QCOM so a RIMM bid would be a way to cement that part of their value proposition. I rule out the straight hardware players given the share prices of those that would be able to pass the necessary security review. I doubt if either Qualcomm or Intel would go after RIMM. Microsoft should really go after them, because their users are the natural demographic that still uses Microsoft's operating system and office software...contrary to those damn "Be Bold" ads with young 20 somethings talking about how useful their Blackberries are. Talk about alienating your core users in search of young blood! RIMM's patents are worth a bundle as well, and acquiring RIMM would help Microsoft establish a beachhead in International markets as far as cellphones are concerned. They make money from Android already, and they will be making money from Windows 8 mobile, and if they can make money from RIMM in Asian markets, that's pretty solid footing. Cheers! Microsoft a much better acquisition candidate - Nokia. Why buy a competing platform when you could buy an excellent hardware maker building devices on your own platform? Why would they buy RIM? To kill it? Nokia also probably has a much better patent trove. Nokia is also much stronger in international markets. They are also more strategic to operators in the US. The patents seem to be worth a lot given the context of todays patent wars. But more and more patents are proving indefensible. The major players seem to be moving towards a patent stalemate. RIM may find its window to monetizing its patents closed if they don't move quickly. Barring a miracle, RIM's platform is awaiting the last few nails on its coffin. Link to comment Share on other sites More sharing options...
Liberty Posted May 30, 2012 Share Posted May 30, 2012 The patents seem to be worth a lot given the context of todays patent wars. But more and more patents are proving indefensible. The major players seem to be moving towards a patent stalemate. RIM may find its window to monetizing its patents closed if they don't move quickly. Good point. Valuing patents at the top of a possible patent bubble is risky. Link to comment Share on other sites More sharing options...
txlaw Posted May 30, 2012 Share Posted May 30, 2012 Regarding patents, I think you need to be conservative and assign less value to them than $5 billion, especially if you haven't commissioned a valuation from a patent shop. Link to comment Share on other sites More sharing options...
racemize Posted May 30, 2012 Share Posted May 30, 2012 Regarding patents, I think you need to be conservative and assign less value to them than $5 billion, especially if you haven't commissioned a valuation from a patent shop. Even further, I don't think a patent shop can actually value patents that accurately--every time we are asked to it is very rough and the market is very illiquid. I'm constantly surprised by the amount of money that can currently be gotten for patent portfolios, even the ones I've written and/or prosecuted. Link to comment Share on other sites More sharing options...
txlaw Posted May 30, 2012 Share Posted May 30, 2012 Regarding patents, I think you need to be conservative and assign less value to them than $5 billion, especially if you haven't commissioned a valuation from a patent shop. Even further, I don't think a patent shop can actually value patents that accurately--every time we are asked to it is very rough and the market is very illiquid. I'm constantly surprised by the amount of money that can currently be gotten for patent portfolios, even the ones I've written and/or prosecuted. Good point. A friend of mind who practices IP lit has also noted that you can't use comps because, in many cases, a large portion of the price being paid for a portfolio can be assigned to strategic considerations. For example, the value of Motorola's patent portfolio could be much higher to GOOG versus to AAPL. Link to comment Share on other sites More sharing options...
Parsad Posted May 30, 2012 Share Posted May 30, 2012 I'd like to know how you can value the patents at 5 B$ mini, what your criterias are, thanks in advance. I'm basing it on the price per patent deal that Apple, Sony, Microsoft & RIMM paid for Nortel's patents ($750K each) and the price per patent that Microsoft paid for AOL's patents ($1.25M each). Yes, they may not be quite as valuable, but we have no idea until someone makes an offer. At the same time, RIMM acquired 17% of Nortel's patents in that sale, and those patents did sell at an average price of $750K per patent, so I think that would be the bottom. So doing the math...RIMM has 4,455 patents multiplied by $1M (the average of both deals)...gives us $4.455B. Thus the reason I said at $5 per share, you would have a significant margin of safety on the total enterprise's value. Cheers! Link to comment Share on other sites More sharing options...
prevalou Posted May 30, 2012 Share Posted May 30, 2012 Thanks Parsad Link to comment Share on other sites More sharing options...
stahleyp Posted May 30, 2012 Share Posted May 30, 2012 According to this article, the patents are worth about $7.50 per share. http://dealbook.nytimes.com/2011/12/28/despite-rim-takeover-talk-hurdles-would-be-high/ Link to comment Share on other sites More sharing options...
Guest valueInv Posted May 30, 2012 Share Posted May 30, 2012 I'd like to know how you can value the patents at 5 B$ mini, what your criterias are, thanks in advance. At the same time, RIMM acquired 17% of Nortel's patents in that sale, and those patents did sell at an average price of $750K per patent, so I think that would be the bottom. Why is that the bottom? Link to comment Share on other sites More sharing options...
Parsad Posted May 30, 2012 Share Posted May 30, 2012 I'd like to know how you can value the patents at 5 B$ mini, what your criterias are, thanks in advance. At the same time, RIMM acquired 17% of Nortel's patents in that sale, and those patents did sell at an average price of $750K per patent, so I think that would be the bottom. Why is that the bottom? Ok, let's not get rhetorical here. We could assume then that people might not even pay $1 a patent...would that seem reasonable to you? At the same time, we could also assume that someone might pay far more than Microsoft's $1.25M per patent price? Would that seem accurate or reasonable? All I did was use the average from the last two sales. Whether that is the price that RIMM would get we don't know, but seems a much more plausible and accurate estimate than pulling numbers out of thin air, or choosing to assume that their patents are worth far less than Nortel's or AOL's. Cheers! Link to comment Share on other sites More sharing options...
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