“For something that seemed like a blockbuster deal, the announcement that Research In Motion would license its BlackBerry email software to handheld maker (and competitor) Palm Inc. did surprisingly little to boost RIMÃ¢â‚¬â„¢s stock price. After spiking by a small amount on Monday, the shares drifted back down to about where they were a week ago, which is about 20-per-cent lower than they were in September, and in fact isnÃ¢â‚¬â„¢t that far off the 52-week low of $60 (U.S.) the shares hit in March. Why would a deal to license its software to Palm — a company that virtually invented the handheld market, and has one of the hottest devices going in its Treo 650 smart-phone — cause such a muted reaction from the stock market?
There are a couple of possible explanations. One favoured by some analysts who follow the company is that this deal has already been Ã¢â‚¬Å“priced in” to the stock, which means that investors were more or less expecting RIM and Palm to do a deal. After all, RIM just recently signed a similar arrangement with cellphone-handset leader Nokia, so Palm shouldnÃ¢â‚¬â„¢t have come as a surprise. ThatÃ¢â‚¬â„¢s difficult to rationalize, however, considering the companyÃ¢â‚¬â„¢s share price is down by about 20 per cent. What else was being Ã¢â‚¬Å“priced in” to the stock that isnÃ¢â‚¬â„¢t being priced in any more? Another possibility is that investors are more concerned with the ongoing litigation between RIM and NTP, the U.S. company that claims it holds a patent on wireless e-mail technology. Continue reading