It is Cheap for a Reason
Here is a thesis I never understand when promoted. The Bloomberg piece is here saying that RIMM should be acquired because it is cheap so Microsoft should buy the company. RIMM is cheap for reason and it is getting cheaper and that is not a reason to buy the company. Just because it is cheap, does not make it a buy. How many people go to the car dealer and say “I would like to buy your cheapest car that needs a lot of work, has legacy problems like a few accidents. I would like to do this because the car is cheap and maybe a lot of people rode in it over the years and I think the brand is iconic so I plan to wave at the other aging models on the rode too.” Why would MSFT or any other company want to take on the RIMM problems just because they are cheap? As if the problems are less surmountable now that you can buy the problems for less than you could a few weeks ago? Some foolish person will buy the stock because (1) it is cheap and (2) hope that some other company would pay a premium to acquire some cheap problems. That thesis makes little sense to me.
* It is all about the network stupid, because it is all about compute. *
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