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Tuesday, September 20, 2011

Why Microsoft Should Buy Research In Motion

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Tuesday, September 20, 2011

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MSFT Up With Tech
Markets are bouncing along in early trading as investors split their attention between the Fed meeting and continued European debt fears. Shares of MSFT are up, in line with the rest of technology. Upcoming catalysts include Windows 8 and entrance into the tablet market; Windows Phone 7 / Mango rollout and adoption with hardware partner Nokia; strides against current market leaders in cloud computing; making money in the online business, including integration of Skype and improving the search / display business; and continued evolution of Kinect and next generation Xbox console. The stock currently trades at 7.8x Enterprise Value / TTM Free Cash Flow.

Here's Why Microsoft Should Buy Research In Motion (Seeking Alpha)
A Microsoft buyout of RIM makes so much sense:

Increases its competitiveness in the smart phone market: Buying RIM brings Microsoft to the forefront of the smart phone battle. RIM’s technology and products together with Microsoft’s strong financials and global outreach could help it become huge competition for Google and Apple.
Easily affordable: With over $50 billion in cash, Microsoft could easily afford the buyout at only $12-20 billion, with plenty of cash left over.
Fits well with recent initiatives: A RIM takeover fits in very well with Microsoft's goals. Become relevant again.

While they are at it, Microsoft should kill the Windows brand. What do you think? Read »

Microsoft To Partner With Cable TV Operators To Pipe Directly Through Xbox (VentureBeat)
Microsoft is reportedly in talks with Comcast and Verizon for partnerships to stream traditional cable TV directly through the Xbox 360 console; getting the normally cable- and fiber optic-based services piped directly to the Xbox. The deals are reportedly "imminent" and could go live within a month. Microsoft first announced that a live TV service would be coming to the Xbox at E3 with an expected release this fall. While users can do this already, it would get rid of the need for a separate set-top box. Read »

Why Microsoft's Stock Is Finally Set To Reboot (Seeking Alpha)
Microsoft’s stock has gone nowhere for over a decade. The stock’s P/E level has steadily fallen, ranging from 29-50x in 2002, and now standing at 10x. Several factors support the argument that Microsoft’s stock can achieve sustained value above $30 in the coming year. If long-term trends continue, Microsoft at current price levels offers increased resilience to correction, good dividend income, and the real prospect of capital appreciation if Windows 8 is a solid base hit. Read »

Get complete Microsoft overage on Business Insider. Read »