Research In Motion Ltd (BBRY) Boom On IBM Takeover Talk

Research In Motion Ltd (BBRY) Boom On IBM Takeover Talk
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Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) shares began to spike on the market this afternoon as rumors about a takeover bid from International Business Machines Corp. (NYSE:IBM) began to make their way onto Wall Street. At the time of writing shares in the Canadian smart phone maker were up 5 percent and still climbing.

Research In Motion Ltd (BBRY) Boom On IBM Takeover Talk

Earlier today a report from Scotia Capital analyst Gus Papageorgiou stated that if Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) can’t do enough to stabilize itself with its current range of smart phones, it is likely that a company like IBM will swoop in and take over at the firm. The report put a price target of $22.50 on the company’s shares, and gave them an outperform rating. Shares in the company opened today at $15.15.

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Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) is a perfect candidate for a short squeeze and that might be multiplying the effect of the increase in the company’s stock. About a third of the company’s float is held short as investors continue to predict that the company will collapse under the weight of its problems.

International Business Machines Corp. (NYSE:IBM) has long been rumored to be considering a bid for Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB), but the rumors have proved untrue thus far. There are many reasons that would deter the company from purchasing the Blackberry maker, and few that give it reason to make that acquisition.

International Business Machines Corp. (NYSE:IBM) got out of the consumer hardware business nearly a decade ago by selling its PC manufacturing arm to Lenovo. Since then the company has concentrated on enterprise level hardware and services, while making key acquisitions to build a presence in the Business Intelligence business.

The smart phone business is an incredibly lucrative one, and Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) is a much more attractive prospect than it was a year ago. The company’s new line of Blackberry smart phones, the Z10 and Q10 have been well received and they may do enough to stabilize the company’s finances.

If International Business Machines Corp. (NYSE:IBM) is planning on acquiring a smart phone maker, Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) is probably the company’s best bet. On today’s market shares in IBM fell a fraction to $204.31 at time of writing.

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