Research in Motion’s (NASDAQ:RIMM) stock gained the most in the last 2.5 years on continuing speculation that the company may be a takeover target. The shares were up 12.5% yesterday, and this is not the first time this has happened. Last week, the stock jumped on the speculation that activist investor Carl Icahn has taken a stake in RIM, which will help him push for a board seat and press the company to consider a sale (see Rumored Icahn Stake in RIM Fuels Takeover, Asset Sale Speculation). Our $26 price estimate for RIM stock is now about 10% above market price.
RIM continues to struggle in the smartphone and tablet market due to increasing competitive pressures from Apple (NASDAQ:AAPL) and Google’s (NASDAQ:GOOG) Android based devices, and a company sale could be a good option for shareholders if completed.
However, we have cautioned in the past that RIM might make a poor acquisition target considering the management’s unwillingness to consider a sale in the past, a lack of a strategic fit for potential buyers and a comparatively weaker patent portfolio, something we discussed in our earlier note titled Why RIM Makes a Poor Acquisition Target.
See our complete analysis for RIM stock here
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