DJ Motient Acquisition Welcome News For Research In Motion
16 May 11:49
By Stuart Weinberg
Of DOW JONES NEWSWIRES
TORONTO (Dow Jones)--Research In Motion Ltd. (RIMM), maker of the popular
BlackBerry e-mail pager, can breathe easier, as it appears that cash-strapped
Motient Corp. (MTNT) has enough funding to last well into the first half of
2002.
Motient, a big Research In Motion customer which operates one of two U.S.
wireless networks that supports the BlackBerry (Cingular Wireless operates the
other), said Tuesday it plans to acquire Rare Medium Group Inc. (RRRR), a New
York-based provider of Internet professional services, in a deal valued at
about $190 million.
At March 31, Motient's total debt was $438 million. In its 10-K report filed
April 2, the Reston, Va. company's auditor, Arthur Anderson, expressed doubt
about the company's ability to continue as a going concern.
Those doubts appear to have been allayed for the time being. In a research
note Wednesday, BMO Nesbitt Burns analyst Ray Sharma said that Rare Medium had
about $157 million in cash at Dec. 31.
"Motient now expects to be funded well into (the first half of 2002) and
expects to reach EBITDA breakeven around the same time," Sharma said. "This
merger increases our confidence that RIM can meet or exceed our estimates of
65,000 units for this channel in fiscal 2002 (ending February). We expect this
news to be positively received by RIM."
In Nasdaq trading Wednesday, Research In Motion is up 18 cents to $30.05 on
about 1.5 million shares. The stock rose 6.6% Tuesday.
Company Web Site: rim.net
-Stuart Weinberg, Dow Jones Newswires; 416-306-2026;
stuart.weinberg@dowjones.com
(END) DOW JONES NEWS 05-16-01
11:49 AM |
