Do Valuations Matter? RIMM/Motorola and SONY/Nintendo

Posted by Howard
on July 16th, 2007

I am reading today that RIMM passed Motorola in market cap (if you live in Toronto, all you read about is RIMM). That makes sense to me. I don’t think Motorola is relevant in my tech life these days. RIMM is integral to my life. I can’t function as a businessman without my Blackberry.

You can’t value that properly. Too new. That’s why the shorts have been bludgeoned.

Now, Carl Icahn is a smart dude. He believes that Motorola is undervalued. He is generally right. He is likely right here. He is patient and maybe is not bothered that RIMM is screaming higher. He should be.

He would have made WAY WAY more money looking at the issue from a Blackberry user’s point of view. Instead, he is down in his Motorola position and watching Blackberry climb 100 percent since his move on Motorola.

Nintendo recently blew past Sony in market cap. Now that shocked even me. I own both. I love the Wii and so do my kids, but I am not as convinced on that one. I think both keep rising for now.

Disclosure – Long Sony and Ninetndo

When the mood of the market turns (it will), the real valuation gap between the two companies will get more realistic. If you can guess win (you can’t and should not be guessing), you win.

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