Microsoft rumoured to be investing $3.5 billion into Research In Motion

Ian Hardy

April 11, 2012 10:11am

When Thorsten Heins, RIM’s President & CEO, discussed their Q4 fiscal 2012 results he said the company “has substantial strengths that can be further leveraged to improve our financial performance.” RIM currently has over 77 million BlackBerry subscribers and although they have $1.1 billion in cash, they’ve suffered over the past year. Hopefully the upcoming release of BlackBerry 10 powered devices in the “latter part” of this year will change all this.

Heins also noted that they are “undertaking a comprehensive review of strategic opportunities including partnerships and joint ventures, licensing, and other ways to leverage RIM’s assets and maximize value for our stakeholders.” Samsung has been rumoured to be one of the interested manufacturers that might sign a BlackBerry 10 licensing agreement, or according to analyst Collin Gillis of BGC Partners says Samsung is interested in “minority investment” in the company. Amazon at one time was another interested party.

Today there’s the ongoing rumour that Microsoft is considering making an investment in RIM. This is coming from Benzinga who’s hearing “Renewed Chatter” on Wall St. that Ballmer and Co. are apparently prepared to inject $3.5 billion into RIM. No other details are listed as to when, but would help them get deeper into the enterprise and government space. Perhaps this is one of the “strategic opportunities including partnerships” that Heins was speaking of.

Anything is possible. Jim Flaherty, Canada’s Finance Minister, recently noted that RIM is “the masters of their own destiny” and they would not block any foreign takeover of RIM. Flaherty also said that “We would like RIM obviously to be successful as a Canadian company, which it has been — a very innovative and successful company.”

Microsoft is focussed on their Windows Phone OS and looking to increase their market share. They are heavily partnered with Nokia for WP7, plus other manufacturers such as HTC, Samsung and LG produce Windows Phone devices.

So as usual, it’s a rumour until something concrete surfaces. What do you think about Microsoft dumping cash into RIM?

Source: Benzinga
Via: N4BB

  • Harry

    that’s nearly half their market capital that would mean they would own 51% of the company canada won’t allow it so there I ruined the rumor

    • JB

      What @Hereric said, plus there are all sorts of ways to invest in a company without buying public stock.

      MS has proven in the past (ahem, APPLE) that thy are willing to support “rivals” in order to maintain some competition in the marketplace. This is especially true when they are not the dominant player in said market.

      WP7 also looks a lot better competing against Blackberry than it does against Android and iOS.

    • More BS

      Here we go again – time to try and pump the stock. Lets count them:

      #1 (~2007): Microsoft may buy RIM *FALSE*

      #2 (~2008): Google may buy RIM *FALSE*

      #3 (2011-2012): Samsung may buy RIM *FALSE*

      #4 (2012): Amazon may buy RIM *FALSE*

      #5 (2012): Microsoft may invest $3.5 Billion in RIM **FALSE**

      If they “invested” that much, they’d own RIM considering the market cap is $7 Billion.

    • ServicePack1

      Without a doubt its just a rumour. Just look for news and you will find:
      -US Government sales dropping (but they have 150 BBs in the white house ha!)
      -Execs leaving RIMM (Getiing fired or golden parachute?)
      -RIMM losing money on every hardware sale ( Operating margins dropping)
      -RIM backtracks on Side-loading apps
      -Stock was at $12.7 and dropping towards a new 52 wk low…

      ..And then Kaboom! out of their RIMWolrd, theis rumours appears and takes the stock to $13.2 (around 6%)
      This has been done a bunch of times and its almost predictible: Billionaire, Samsung, Sony, Apple…. now MS.
      I can’t wait for the Tim Hortons rumour coming up in May.

    • More BS

      #2.5 (2011): Carl Icahn may buy RIM *FALSE*

      I had forgotten that gem.

  • JB

    WP7, Bing and now (maybe…) an investment in RIM?

    “Fools and their money are soon parted”

    I have an image in my mind of two dinosaurs huddling together for warmth after the asteroid hit. They still died, but the process was made that much more awkward for everyone.

    • Darryl

      When you say fools. Are you referring to Microsoft? Because they made a similar investment in Apple once!

  • Hereric

    The Canadian govt already said they aren’t blocking the sale of rim to foreign entities… I could see them being bought out.

  • Andrew

    Harry, you’re obviously not Canadian. The only thing Canada cares about is it’s natural resources, it’s definitely not tech. They won’t be blocking any sale related to a technology company, they could care less.

    • Pedantic

      The could care less? How could they care less? Or they couldn’t care less?

  • Rory

    why invest $3.5 billion and not just buy them out for $1 billion?

    • Darryl

      Because it would cost alot more than 1 Billion!

  • Sam

    MS need to inject some talent and people that have even a minimal ability to understand WHAT WE WANT. Not what they want to give us. If they had done that in the first place they wouldn’t be in this position.

  • Ron

    Why would Microsoft want to get involved with Rim? Are they planning on running WP7 on new Blackberry’s and scrapping BB 10?

    • Kennedyk24

      Obviously Microsoft wants to get involved in their enterprise solution, the one thing RIM has that nobody else can touch right now.
      this has nothing to do with putting WP7 on bb10.

  • shaggyskunk

    Too bad that Flaherty, still blocks foreign ownership of the Telecoms! Would be a nice change to get some actual competition in Canada!

  • Another Rumour to Spike the Stock

    So lets get this straight here:

    In the mobile wars, Apple and Android occupy the top spots. Then WP7 and BB are competing for #3 with no one else. So Microsoft is going to spend $3.5 Billion to solidify its 3rd place spot. Why not just hold the cash and stay the course, they are already #3.

    RIM is dead. Stop trying CPR, its over, unplug the life support. Let them rest in peace.

  • Kiko

    I think this is a great idea. Blackberry phones are crap but Blackberry Fusion is awesome. Speak to any administrator and they will tell you that BES is awesome compared to plain vanilla active sync.

    I actually think this is very smart on Microsoft part. I personally think they should acquire the RIM. Like that they would own both backend servers for businesses.

  • Matt

    @shaggyskunk – RIM is not a Telecom. RIM is a technology company based in Canada. There is a HUGE difference. RIM is selling goods to the public not just in Canada, but across the world. A Telecom provides a service to people who live in that particular country (ie: Bell, TELUS, Rogers etc…).

    There is absolutely nothing that states that RIM could not be wholly or partially owned by an American company. Far from it, many American companies make their way into Canada to sell goods. We wouldn’t have much of an economy if that wasn’t allowed as not a lot of consumer goods are developed and designed in Canada by a Canadian company.

  • Miket

    BBM on Windows Phone? Yes Please.

  • Negative Ned

    It is like throwing money into a black hole.

  • CDL

    Sounds like what Microsoft did for Apple before the iMac launch in 1998. Was a very smart move to invest in a low cost but successful company and ride the turn around. I believe Microsoft made a substantial profit on Apple because of this and also settled several patent conflicts as well. This could be a win-win for both MS and RIM.

  • woohoo

    I hope MS engulfs RIM actually. Just integrate it into Microsoft branding. I want RIM and Blackberry to be completely done.

  • TouchMyBox

    Two irrelevant companies teaming up…

    Seems fitting.

  • abc123

    This rumor is meant to promote investor confidence in RIM. This will in turn cause the stock price to go up as they jump on the RIM bandwagon. Meanwhile, Benzinga (the entity behind the rumor) is selling and making some money.

    Carry on.

  • Axe

    Keep in mind BES runs on M$ Windows, and is integrated fully into M$ Exchange.

    If Apple wins the smartphone battle, they can get email and such from anything, including exchange or google/gmail or anything else. No M$ guarantees.

    If Android wins, Gmail is king, and it’s not running on Windows servers I’ll bet. Yeah android can still do exchange…and yes M$ makes more money on Android handsets, but…

    If RIM turns around and does well, M$ wins via servers and infrastructure. And Canada wins too!

    M$ seems to have enough money to keep their hand in all camps, including Nokia etc. If they see fit to dip their hand into RIM, why not? Helps lots of folks, and themselves too.
    But always keep an eye on them…

    my 2c

    • Maverick

      @Axe, I stopped reading after I saw the first $. Grow up please and thank you.

  • bill

    @Axe – The nineties called and they want their M$ back.

  • Tommy

    Go get it MS!!

  • Keith

    I don’t see a path myself but I sure hope RIM finds a way to survive. But I don’t for a second believe that Microsoft would invest 3.5 billion in them–no one believes in RIM right now. Windows Phone OS is a way better than anything RIM has or has in the pipeline and does any one think that RIM could make handsets that could compelte with Nokia’s right now?

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  • Jack

    “Although they have $1.1 billion in cash”

    They actually have over $2 billion.

  • Nate

    This could be a big game changer in the mobile OS ecosystem.

  • Capt Black

    More like that Blackberry OS (10 onwards) and their patent portfolio will be spun out into a JV with Samsung, HTC, and possibly Sony / Amazon as investors. Gives the OEMs what they need – capable smartphone OS and app ecosystem independent of Google – and RIM…a way to accelerate their ecosystem to remain relevant.