Is the Research In Motion Ltd (BBRY) Buyout a Trap? – AT&T Inc. (T)

Since the remark, several commentators have weighed in on the potential of a Lenovo buyout, most with the view that it’s an unlikely scenario. For one thing, Research In Motion Ltd (NASDAQ:BBRY) is one of Canada’s biggest technology success stories, and there’s no indication that Canadian authorities would authorize a sale to a Chinese buyer. The regulatory has a history of taking a protective stance when it comes to the sale of those companies it sees as critical to the local economy and image.

The analysts weigh in
While some analysts have been quick to point out that their opinions of the stock aren’t driven by a takeover scenario, many maintain a very positive outlook. Ed Snyder of Charter Equity Research sees a very positive future for the company:

Fundamentals will be a little more difficult; now it’s blocking and tackling, and it’s a lot tougher environment today than when BlackBerry first introduced the smartphone. They have lots of cash, they’re gonna be around for a while, but it’s going to be a real fight. The stock is going to be a lot less attractive once the first results come in, and people see it’s going to be harder to take back share. It’ll double couple years from now.

It seems premature to be calling for a 100% return in the next few years, ahead of the U.S. release, but even at half that level, the stock looks attractive. Scotiabank’s Gus Papageorgiou said: “We believe the Street is pricing in such a weak fiscal 2014 that BB10 does not need to be an outstanding success to surprise.” All of these signs point to strong institutional support for the stock and, perhaps more importantly, the patience to see how things play out beyond the first few weeks.

The outlook
While the Lenovo rumor appears to be too preliminary to warrant rushing into the stock, the general view on the stock is strong. Given the mixed prospects moving forward, I wouldn’t call the buyout a trap, nor would I call it a catalyst worthy of action. Research In Motion Ltd (NASDAQ:BBRY) remains on life support, and only solid traction in the U.S. is likely to keep the company alive. Even acknowledging its strong cash reserve and improving burn rate, it’s all about sales. The surge earlier this week means I would probably sit the launch out on the sidelines and look for a better entry point for my speculative dollars.

The article Is the BlackBerry Buyout a Trap? originally appeared on Fool.com.

Fool contributor Doug Ehrman and The Motley Fool have no position in any of the stocks mentioned.

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