Sterne Agee Maintains Neutral on Research In Motion After New Samsung Acquisition News

Sterne Agee has published a research report on Research In Motion

after renewed speculation yesterday that the company would be acquired, most recently by Samsung. In the report, Sterne Agee writes, "While we believe there is some intrinsic value in RIMM as an acquisition target with its 75 million subscribers, patent portfolio, BlackBerry OS, and push network, we are unsure if a price of over $10 billion makes sense. Currently, the company has a market capitalization of $9.2 billion, meaning upside could be limited. We believe logical buyers are AMZN, MSFT, Samsung, and possibly Facebook. We believe its most valuable assets are arguably its patent portfolio and BlackBerry Messenger (BBM) app. We estimate its patent portfolio could be worth $2-$3 billion assuming the prices that an AAPL led team paid (which RIMM was part of) for Nortel assets and GOOG for MMI. For BBM with its 45 million users, we estimate it could be worth $2-$3 billion. Last but not least, we believe the value of its push network and BlackBerry OS are more questionable given competitive issues both have had in the marketplace but nonetheless, we assign a value of $1 billion (the price paid for PALM). This gives us a valuation of $5-$7 billion, meaning a stock price of $9-$13, which is a bit below where it is currently trading." Sterne Agee maintains its Neutral rating on Research In Motion, which closed yesterday at $17.47.