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Technology Stocks : Research In Motion TSE RIM Nasdaq RIMM
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To: nauset who wrote (670)2/28/2000 2:45:00 PM
From: nauset  Read Replies (3) of 989
 
details of MER's upgrade of RIMM to $200
> Merrill Lynch
>
> Research In Motion (RIMM; $153 1/8; D-2-1-9)
> 00E $ 0.16; 01E $0.40
> * Research In Motion has today announced that it will be entering into
> distribution agreements with both America Online and Compaq Computer.
> Both of these deals are very important, in our view. AOL will be
> rebranding the device, which will be used to deliver AOL email and instant
> messaging.ÿ AOL email has apx. 21 million users, and their instant
> messaging has 56 million users.
> * Importantly, in our opinion, we believe it likely that we will see
> penetration among AOL small business users, who we think will probably be
> willing to pay the apx. $40 per month that the device will cost.ÿ At this
> point we do not think that Compaq will be rebranding the device.ÿ We
> nonetheless consider this announcement to be important, as we believe that
> CPQ is among the largest Microsoft Exchange resellers.
> * Therefore, we think it is important for RIMM to have this
> distribution channel.ÿ We would note that this is a real market at
> present, whereas the AOL market is one which we believe will grow over
> time.
> * We are raising our 12-18 month price objective to $200 based on 86x
> our 01 estimated revenue forecast.
> * We think that the revenue impact for CPQ is likely to occur sometime
> in the middle of calendar 2000, and the impact from AOL will commence in
> the late calendar 2000 timeframe.
> (W. Crawford)
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