Value, or Value Trap? I finally got a chance to review the financials. My observations:
- Book value of $18.33; tangible book value of $11.89 (a roughly 37% discount to today's share price)
- It's still a cash cow, with over $700M in operating cash flow; overall cash flow was moderately negative due to various investments (short term assets, capital assets, intangibles)
- Despite a 33% sequential quarter plunge in revenue, the adjusted loss (it's not like anyone was valuing the goodwill anyway) was only
.37 per share.
The BB10 delay was disastrous, and this drubbing is well deserved. I have next to no confidence the BB10 will ever be delivered at this point. That said, we are into tantalizing value at this point. Tomorrow a company could offer a 50% premium ($6B or ~$12/share) and buy the company for tangible book value. Their net cash cost would be $3.5B - chump change for a major player. They'd get BB10, QNX, a leading security network, and installed base of $78 million users, and the large patent portfolio for free.
I can't help but think RIM will be bought at these levels. I may be a shareholder by the end of the day. As they say, misery loves company!