RIM stock rises on acquisition speculation
'Very attractive' target
Blackberry developer Research in Motion (RIM) could be the subject of a takeover bid, Goldman Sachs suggested this week after dubbing the company a "very attractive" acquisition.
The report helped push RIM shares up 7.4 per cent on speculation that there may be more to the investment bank's comments than meets the eye. On Nasdaq, RIMM stock closed at $78.44, up from the previous day's closing price, $73.02.
Yesterday's closing price values RIM at $14.7bn.
GS' report mentions two possible suitors, Nokia and Motorola, which might be interested in RIM to boost corporate sales. Both are best known for their handset hardware, and despite its focus on enterprise software, RIM is similarly perceived as a hardware company, making over 70 per cent of its revenues from device sales.
That puts it head-to-head with handset makers, while other other enterprise push email providers, such as Good Technology and Extended Systems, focus on server software and code for a range of third-party client devices.
RIM's efforts in the latter area have been hampered by a longrunning legal battle with NPD over alleged patent infringement. The Canadian company recently lost its appeal against a lower court verdict that it had indeed violated NPD's intellectual property rights. The US Court of Appeals overturned a ban on the sale of RIM's client software on devices other than its own, but the injunction could be reapplied when the case returns to the lower court.
To date, RIM has built a subscriber base of over 2m users. This week, UK mobile phone network O2 said it would offer RIM's handset-styled Blackberry 7100 to consumers and business users. The 7100 is seen as a key tool in growing RIM's subscriber base by attracting users previously put off by its bulky devices, most of which make good email systems but poor mobile phones. ®
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