RIM Source Says Selling Not an Option
Research in Motion (NASDAQ:RIMM) has spurned takeover offers from Amazon.com Inc. (NASDAQ:AMZN) and other hopeful suitors, preferring to solve its myriad problems on its own. It’s been reported Nokia (NYSE:NOK) and Microsoft (NASDAQ:MSFT) also discussed a possible joint bid.
According to sources, which preferred to remain anonymous, the RIM board has mandated Co-CEOs Mike Lazardis and Jim Balsillie to reverse the company’s declining fortunes with measures such as launching new handsets, leveraging assets such as Blackberry Messaging and restructuring.
Amazon reportedly reviewed a potential deal with RIM in the summer, even hiring an investment banker for the purpose, but did not make an offer. Nothing is known about the other parties that may have approached RIM.
RIM’s market cap is down 77% over the last year to $6.8 billion due to dismal results, delayed product launches, the Playbook fiasco and other problems. “Falling knife” appropriately describes the company’s stock. According to a head of technology banking at a Wall Street bank, though RIM had been approached for discussions by interested folks, it was difficult to fix a value with the stock sliding so precipitously.
On the other hand, RIM’s (NASDAQ:RIMM) board seems to have its mind made up. “Selling the company or an economic joint venture is probably not in the cards right now,” said a source. “Until you stabilize the platform, people are going to be very nervous about spending $10 billion or more.”