NEW YORK ( TheStreet) -- As we celebrate U.S. independence on July Fourth, it's worth looking at three troubled companies that may soon lose theirs. There are plenty of other companies that are doing well and have solid balance sheets with plenty of cash.
When companies have a significant cash hoard, investors often pressure them to issue dividends or buy back stock. But investors can also demand that companies put that cash to work with acquisitions. With so many stocks trading at depressed levels right now, I suspect the next two quarters will bring about plenty of M&A activity. So without further ado, here are three companies that will be likely takeover targets:
What would an M&A discussion be without Research In Motion? The company has shown a chronic inability to walk and speak at the same time. The three main suitors for RIM should be Facebook ( FB), Sony ( SNE) and Microsoft ( MSFT). You can find my case for Facebook and Sony in "RIM up for Sale: Why Facebook or Sony Will Close the Deal." But the more likely candidate is Microsoft, which I wrote about in "Will Microsoft Save RIM From a Certain Death to Beat Apple?." There are many reasons a Microsoft acquisition makes sense. All Microsoft would need to do following an acquisition would be to spend spend a few hundred dollars per RIM user to offer replacement phones using the Windows Mobile operating system that also have the BlackBerry email service and RIM's popular BBM messenger service. That would quickly quadruple Microsoft's Windows smartphone market share. What's more, a deal would redirect Microsoft's focus to where it should have been in the first place: attacking Google ( GOOG) and the phones and tables that use the Android operating system. I think Android's success has hurt Microsoft more than Apple ( AAPL) iPhone, and Google has become a threat not only to Microsoft's phone business but also to its Office and operating-system businesses. Whether Microsoft does a deal remains to be seen, but a deal makes perfect sense.