This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

RIM Lays Down Burden

Although the settlement offer is a significant amount for RIM, the outstanding balance represents just a third of the $814 million in cash and short-term investments the company had on hand at the end of its third quarter. Indeed, many analysts were worried the company would have to pay far more, including a hefty ongoing royalty fee. Had NTP prevailed in the case, it could have barred RIM from offering its services anywhere in the U.S., which is by far its most important market.

NTP "could have gotten more," said one analyst at an independent research shop, who also asked to remain anonymous. "$450 million is nothing to RIM."

"They could pay $1 billion and probably go out and raise more tomorrow," added the analyst, who has no position in RIM and whose firm does no investment banking.

The fears about the lawsuit helped send RIM's shares spiraling downward . The company's stock hit $103.56 on the day of the December appeals court ruling, but ended up closing at $85.44. As recently as Friday, the company's stock was trading near $60.

In addition to the lawsuit, bears have been playing up the competitive threats to RIM. On Friday, for instance, Good Technology, the company's chief rival, signed its own licensing deal with NTP, a move that had the potential to strengthen NTP's position in its dispute with RIM. Nokia (NOK) has also licensed NTP's technology, and many analysts have feared Microsoft's (MSFT) potential in the wireless email market.

But bulls have dismissed the competitive threat in the past and thought little more of it after the settlement announcement on Tuesday.

RIM has consistently beaten Good Technology to date, and Nokia has yet to come out with a competing product, they noted. "The bottom line is that the market is growing," said the buy-side analyst. As long as RIM provides a good product, they should get their share. I don't see Good or Nokia growing faster than RIM."

2 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs