peHUB declares RIM dead, set for "breakup"

If you ply your trade in the world of private capital, you are well-served to read the morning musings of Dan Primack at Fortune and the team at peHUB. There’s a perennial trove of good skinny on the deals, capital and people of relevance across the USA and Canada.

But when they delve into the public markets, things can get clouded at times, for there are far too many listed shares to track, usually covered by experienced analysts with grander resources at every turn. But that doesn’t mean opinions aren’t warranted (even if crazy), which is what peHUB (owned and published by Thomson Reuters) tried its hand at earlier today:

The Death Rattle: While equities investors looked at global markets and responded with a collective shriek, Research in Motion investors regarded the company’s “free app bonanza since we cost you your e-mail” giveaway and uttered a collective yawn. RIM’s investors (including… Thomson Reuters, the publisher of this blog and wire) are likely once again re-acquainting face with palm and the company’s sale prospects are looking dimmer, given how M&A is playing out across virtually every market but energy right now. What’s left? An outright breakup of the company, with handset and security assets being jettisoned in one direction, VC investments dealt via secondary market and patents auctioned off to whoever bids Pi million + X. All things considered, this could still mark a win for some Research in Motion investors. In other news, the Maple Leafs are in first place (see Jim, there is a silver lining!).

Break-up Research In Motion (RIMM:Q, RIM:TSX)? Equity Research Analysts have talked about how that might unlock some value in the stock, but others disagree. No one (at least no one lacking an agenda) has yet to pronounce that things have gotten so bad at RIM that there’s no choice left but to liquidate the company’s assets, however.

Even if there is a restructuring, this should have no impact on our pals at the BlackBerry Partners Fund, who are in the process of closing a very successful raise for Fund II. Although the BlackBerry name is on the door, and RIM is a minority limited partner, there’s nothing in the future that would lead to a sale of the underlying VC investments; even if Microsoft acquired RIM tomorrow.

I agree that the patents are worth real dollars, but RIM’s ~70 million profitable subscribers aren’t going anywhere. Last week’s outage was annoying to us all, but if you didn’t get an iPhone in Q2 of this year, and you could care less about the sexy 4s version, are you going to chuck your 9700 and pass up the new offering when the 9900 does all that most enterprise customer need to be done?

Like many, I wish Jimmy would lower expectations, not raise them to unachievable heights as he did with the Globe & Mail yesterday:

In an interview with The Globe and Mail, Mr. Balsillie said he was “certain” of success and predicted that observers will be blown away by the slew of announcements RIM plans to make in San Francisco.

“It is really, really powerful how we’ve intercepted the future,” he said.

Whatever is announced in San Francisco this week, few tech analysts (and even fewer hedge fund managers) will ever admit that RIM has somehow “intercepted the future” in the few days that have passed following the death of Steve Jobs.

That being said, iconic firms are hard to wipe off the face of the map. I remember when Apple was left for dead not too many years ago. And Chrysler. And the entire commercial real estate industry, etc….

RIM’s role in the ecosystem will evolve, and the overall corporate ownership structure may eventually morph or even change hands via M&A, but like the serf in the Monthy Python & The Holy Grail sketch, “I’m not dead yet”.

MRM
(disclosure – I own RIM)