Research In Motion (RIMM) Has a Big Bullseye on its Back
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Oh how things change!
Just Tuesday investors wouldn't buy Research In Motion (Nasdaq: RIMM) stock with your money. Now a few hours later, everyone wants it.
Shares of the BlackBerry maker are up over 9 percent in pre-open action Wednesday following reports Amazon.com (Nasdaq: AMZN) hired a banker this summer to explore a bid for the company. Not only was Amazon looking at the company, but Microsoft (Nasdaq: MSFT) and Nokia (NYSE: NOK) contemplated a joint bid for the company.
While nothing came from this "tire kicking," it shows RIM was an attractive takeover target at even much higher levels.
Whether the company will sell at these levels is another story. The Reuters report, which focused on the Amazon.com overture, said the merger discussions were a distraction for management. Instead of a deal, managers have decided to focus on getting the business back on track.
While it does not look like a formal bid was ever launched by any potential suitor, the RIM Board would have an obligation to shareholders to review any and all offers. It could be argued the Board should hire a banker to explore strategic options at this point.
If the company doesn't play its cards right, RIM could find itself the target of more aggressive activist investors who could wrangle control of the board to get their way. Think Carl Icahn...
Just Tuesday investors wouldn't buy Research In Motion (Nasdaq: RIMM) stock with your money. Now a few hours later, everyone wants it.
Shares of the BlackBerry maker are up over 9 percent in pre-open action Wednesday following reports Amazon.com (Nasdaq: AMZN) hired a banker this summer to explore a bid for the company. Not only was Amazon looking at the company, but Microsoft (Nasdaq: MSFT) and Nokia (NYSE: NOK) contemplated a joint bid for the company.
While nothing came from this "tire kicking," it shows RIM was an attractive takeover target at even much higher levels.
Whether the company will sell at these levels is another story. The Reuters report, which focused on the Amazon.com overture, said the merger discussions were a distraction for management. Instead of a deal, managers have decided to focus on getting the business back on track.
While it does not look like a formal bid was ever launched by any potential suitor, the RIM Board would have an obligation to shareholders to review any and all offers. It could be argued the Board should hire a banker to explore strategic options at this point.
If the company doesn't play its cards right, RIM could find itself the target of more aggressive activist investors who could wrangle control of the board to get their way. Think Carl Icahn...
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