If RIM is worth more as components than Fairfax is offering, why not say no to Fairfax?
Would that not force the board to sell off the components and thereby return the maximum value to all the shareholders, not just Fairfax? Could we not, as shareholders, just say no?
To those who are more on top of this than I, is the reasoning shown below faulty?
As far as I can see, all that's happening with the Fairfax bid is that Prem is averaging down his $/share price big time, at the expense of many other investors. And the board is letting this happen for whatever reason - to please Mike and Prem, because this is the "best" offer they'll get to keep the company whole, etc . But I think that if the company is worth more as parts, then so be it. Return the value to the shareholders. As one who was willing to bet long and hang in there, it's not fair for me to see anyone else get preferential treatment.
As I very roughly recall from a variety of other posts, RIM has approx $7-$10B in assets if sold in components :
- $2.6B cash
- $2-$4B patents
- $2-3B NOC and BBM
- $.5-$.75B real estate and misc
These are all based on memory and there are lots of estimates out there, but I think the rough numbers are reasonable and they completely ignore the cash value of any written off inventory (sell it for $.1 on the $1!). If that's the case, with the Fairfax offer estimated at $4.7B, there's a lot of room for error in the favour of the "non-Fairfax" shareholders.
Comments? Is there a mechanism to just say no? Does it make sense?
TIA - R.