Samsung confirmed it's not considering buying the BlackBerry maker, sending stocks sliding after a hopeful rise. More likely, says an analyst, is a licensing of BlackBerry 10.
Research
In Motion, struggling to halt the slide in its smartphone market share and
stock price, saw a glimmer of hope earlier this month when rumors began
circulating that Samsung was considering buying the BlackBerry maker.
However,
Samsung officials have put a spike in those rumors, telling various media
outlets that not only are they not interested, but that there has been zero
contact between the companies.
"Media
reports of Samsung Electronics' buyout of Research In Motion are not true.
Samsung is not considering the acquisition of RIM," Samsung Canada
reportedly told the
Financial
Post in an email.
RIM
policy is not to comment on rumors.
Samsung's
statements had a direct hit on RIM's stock prices-which had been up on the
initial rumors-sending the price down 5 percent in premarket trading Jan. 18.
However,
some analysts are still positive on RIM. Investment banking group
Jefferies, in a Jan. 17 note to investors,
raised its target to $17, explaining that while it suspects the rumors aren't
true, it sees RIM as "exploring many options" and believes a
licensing of the
BlackBerry
10 OS is the most likely outcome.
The
firm also made a handful of additional, interesting assertions, such as that:
RIM
will license BlackBerry 10 and charge $10 per device.
Equity
analyst Peter Misek wrote that this would enable RIM to maintain its service
revenues, build ecosystem momentum and be a boon to Samsung and HTC, which
would gain access to RIM's subscriber base, be able to loosen their dependence
on Google's Android and gain a better foothold in the enterprise market.
The
open-standards-based BlackBerry 10, wrote Misek, "is effectively an
Android derivative and therefore many bridges are possible."
RIM
will appoint a new chairman of the board.
RIM
co-CEOs Mike Lazaridis and Jim Balsillie, to the displeasure of some investors,
currently also share the chairman role. The most likely candidate to take over
the position, writes Misek, is Barbara Stymiest, a current member of the board
and a senior executive at the Royal Bank of Canada.
Were
licensing to occur, a major company restructuring would be required.
Licensing
would "devastate" the hardware business and require RIM to slim down.
Jefferies hypothesizes that licensing has about a 90 percent probability, while
an outright sale of the company or its hardware is more in the neighborhood of
40 percent.
Restructuring
could lead to long-term success.
Were
RIM to restructure, maintain a quarterly hardware run rate of 8 million to 10
million units and successfully license off BlackBerry 10, Jefferies "could
see" RIM stock going up to $25-where it was this summer when Amazon,
Microsoft and Nokia reportedly kicked the tires, considering a purchase,
according to the Financial Post report, which noted that RIM rebuffed such
entreaties.
The
Post adds that RIM stocks were also helped during the Jan. 9 week by rumors
that RIM had hired investment bank Goldman Sachs to explore the company's
options, which could include the sale of all or parts of the company.
The
surety-stubbornness?-that RIM's head executives have shown, however, makes the
former difficult to imagine. Quarter after quarter has seen them pointing to
the final few puzzle pieces that need to click into place to turn things
around. Most recently, these have included the upcoming BlackBerry 10 release,
redesigned PlayBook tablets and Mobile Fusion, a more inclusive way for
enterprises to manage a variety of mobile platforms.
"What
is clear to us is the value of [RIM's subscriber base] and the world's largest
private cloud combined with some patent value continues to provide
support," wrote Jefferies' Misek. "However, near-term trends continue
to be challenging so we maintain our Hold."
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