Perhaps the answer is zero. Conversely, Research In Motion, currently trading
at $10 a share, could be considered undervalued in only one of three
scenarios.
Sale
Scenario one: a sale. None of the technology industry suitors that could fund
such a deal (RIM has an enterprise value of about $3bn) makes sense.
Microsoft and Google have already joined hands with Nokia and Motorola
Mobility, respectively. Samsung is doing perfectly well on its own. A purely
financial buyer might be interested in the service revenues that RIM’s
nearly 80m subscribers generate. They amount to about $5 a month per
subscriber, or $4bn last year, at gross margins of 80 per cent or so.
Surely this is a business that could be run for cash? But RIM has admitted
that subscriber growth has ground to a halt because of high “churn”
(customer losses) in the US, where the service fees are highest. So that
service revenue stream is about to start declining and can only be propped
up by investing in, rather than gutting, the business.
Partnership
Scenario two: a partnership or licensing agreement. Perhaps a technology giant
interested in entering the mobile arena would licence Blackberry’s new
operating system? But if anything is certain about mobile computing, it is
that OS’s need scale.
The best case is that RIM fights for third place - behind Apple and Android -
with an infinitely rich and dead-determined Microsoft, whose own new OS is
getting good reviews. Good luck.
Cut costs, new products
Scenario three (amazingly, the most likely one): RIM cuts costs, releases
great new products and starts making money again. The proposition here is
that a lossmaking company suffering rapid operational decline in a viciously
competitive industry returns to sustained profitability by selling an
unproved technology. Any takers? Do I even hear $10?
Dit artikel is oorspronkelijk verschenen op z24.nl