RIMM in Motion on the Lenovo Rumor

 | Jan 24, 2013 | 1:44 PM EST
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Research In Motion's (RIMM) stock looked like it was heading for a downer day today.

First, there were Apple's (AAPL) results last night, which led to a 10% drop in its stock.

Second, Nokia (NOK) which had pre-announced good earnings a couple of weeks ago, delivered its real earnings today. People were disappointed by the slowing growth in China and Latin America. It also dropped 10% initially.

Research In Motion's stock opened today down 3.75%, but that quickly turned around when news came out of Davos that Lenovo's CFO said that Lenovo is looking at partnering or acquiring a number of companies in the mobile space, including Research In Motion.

The fact that he mentioned RIMM by name seemed significant, and the stock immediately spiked over $18 to hit 52-week highs.

So, do you buy on this Lenovo rumor?

I think so.

Although it seems to be a strange negotiating strategy to mention the name of a company you're considering buying, it seems like it was more of a slip-up on the part of the CFO, judging by the PR reaction afterwards.

It does suggest that there's real interest in RIMM from Lenovo. And this makes sense.

Lenovo -- just like Hewlett-Packard (HPQ) and Dell (DELL) and every PC maker – needs a mobile strategy. Lenovo has done some experimentation with smartphones and tablets using Android. But how is it going to differentiate itself from LG, HTC, ZTC and Huawei?

Lenovo does have big ambitions. Otherwise, it wouldn't have bought the ThinkPad business from IBM (IBM) a few years ago. I believe the same will be true now with mobile.

Buying RIMM would be an intriguing play for Lenovo. A deal would bring Lenovo a strong operating system and a big installed base of 80 million global subscribers. It would bring Lenovo into the enterprise, which is already a natural fit. It would also make Lenovo a global player in smartphones (and tablets). The company enjoys that status in PCs but not yet in mobile, where it is seen more as a niche Chinese Android vendor.

The cynics about this deal worry about the sensitivity toward this deal from the Canadian government and from U.S. government agencies that are big BlackBerry users. These governments might openly worry about the Chinese having access to private encrypted data that travels over the BlackBerry network.

This is an issue, and it would be a hurdle for any Chinese buyer of RIMM.

But the Lenovo's CFO's musings suggest that there are big players out there -- Chinese and non-Chinese -- that now see or will see value in the assets that RIMM has collected over the past few years.

The bloom may have come off RIMM's rose in the last couple of years, but it remains a player in a rapidly growing and important area: the mobile Internet.

One intriguing question is, why couldn't IBM buy RIMM and then license the use of the operating system and phones to Lenovo? Essentially, IBM and Lenovo could be joint owners of the assets.

And when people start to think about reasons why certain companies might buy RIMM, other companies will start thinking about acquisitions for themselves.

That tends to be good for a potential acquiree's stock price.

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