BB10 is Probably Dead - Options Going Forward I decided to buy on Friday knowing that BB10 will probably never see the light of day. They either have bright developers running into serious roadblocks, or they have incompetent developers. And what competent developers they have left are probably leaving for greener pastures soon. It makes no sense whatsoever to keep funneling cash into a project has little chance of fruition. By this point if management can't get an ironclad guarantee the software will be ready by calendar Q1 2013, they should cease efforts there immediately. If they can, they should be licensing it to everyone who comes knocking; what they need most right now is scale.
I bought because RIM still has a sound balance sheet (especially relative to their current share price) and it still has some strenghts, if only management/the board would capitalize on them. Such as:
1. Hardware design excellence in the QWERTY space. A lot of people simply love the BB physical keyboard. There will be a market for that going forward. RIM can produce BB's using BB10, Windows Phone 8 and/or Android to capitalize on this strength. This is a key area where BB can differentiate themselves from the competition.
2. They are still recognized for market-leading security, especially with regard to the lucrative government and enterprise space. If BB10 isn't feasible, why not talk to Google or Microsoft about forking an OS to work with their secure network? Heck, have the partner do it in return for a share of the (very high margin) network revenue. Again, this is an area where RIM can differentiate itself.
3. They have an large installed user base, that despite all their blunders still isn't shriking on a worldwide basis.
4. They have a large patent portfolio. If you listen to the bashers, the patents are worthless. I strongly disagree. I'd be shocked if they got less than $2 billion for them, which is $4 a share by itself.
At $7.5, this company is valued at $3.5B. When you subtract cash, it's valued at $1.5B. That's almost a rounding error on the balance sheets of Microsoft, Apple, and other big players out there. (MS has ~$75+ billion in cash and short-term investments). MS could scoop RIM up tomorrow for $6B and not break a sweat.
To each his own, but I think shorting at these levels is a very, very bad idea. I very much anticipate someone is going to make an offer soon, whether it be for a partnership or outright buyout. There were reports months ago of AMZN, MS, and Samsung sniffing around RIM. At this ultra-depressed share price I think it's just a matter of time. IMO, FWIW!