Why The RIMM Buyout Rumor Is Great News For Tech Penny Stocks
2012 is shaping up to be an exciting year for technology stocks. Weve already had some big moves and intriguing news from the sector.
Take for example this weeks rumor electronics giant Samsung is allegedly interested in purchasing Research In Motion (RIMM), maker of the Blackberry.
Supposedly, Samsung is trying to differentiate from the competition by adding RIMMs high end mobile operating system to their already robust handset business. The hardware side of the business has become increasingly commoditized. And Samsung has a lot to gain in a market dominated by relatively few competitors.
Not to mention, RIMMs meager $9 billion market cap implies the company would be affordable. (Samsungs market cap is over $130 billion.) The Blackberry maker had a rough 2011 and theyre getting lapped by the competition.
Now, Samsung has already denied the rumor. (RIMMs supposedly pricing themselves at an unrealistically high level. Seriously? Has management looked at what their stock has done over the last year?)
Heres the thing
Samsung may or may not be seriously interested in RIMM but thats not whats important. I dont doubt theres at least some truth to this rumor. And that means this potential deal represents something very significant
A huge opportunity in tech stocks.
You see, tech companies are frantically looking for an edge. Technology giants like Apple (AAPL) and Google (GOOG) are increasing their market share dominance. And theyve put the rest of the tech world on the defensive.
This is key
We could be on the verge of significant consolidation in the tech sector. At the very least, were going to see a wave of intellectual property sales and licensing deals.
Cash rich companies (there are lots of these) will be looking to gobble up patents, acquire or license innovative technology, and expand into new areas. Basically, theyll do whatever they can to keep up with the big boys.
Heres the best part
This strategic shift in the tech sector will be a huge boon for tech penny stocks.
The bigger tech players are on the hunt for small tech companies with innovative technology or impressive patent portfolios. And that represents significant opportunity for penny stock investors.
Look for small, first class tech companies with promising technology. Many of these will be acquisition targets in the near future, if theyre not already. And if youre a shareholder in one of these companies when they get acquired well, lets just say it will be worth your while.
Yours in profit,
Gordon Lewis
Category: Investing in Penny Stocks, Technology Stocks
