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Research In Motion (RIMM) -9.9% thanks to the FQ1 warning included in its "business update."...
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Wednesday, May 30, 2012, 9:27 AM ETResearch In Motion (RIMM) -9.9% thanks to the FQ1 warning included in its "business update." Virtually no analyst is willing to express a positive opinion on the company, and most are skeptical a buyer offering a significant premium will emerge. Baird considers it unlikely Microsoft or Facebook would have any interest, while Stene Agee believes a deal at or below current levels might be all RIM receives. Bernstein thinks the BB10 launch "will most likely turn into a disaster."
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This news story has 9 comments:
I was caught offguard by this and wasn't prepared for the share price to drop 10% overnight and doesn't look to recover anytime soon.
I'm still addicted to my BB, and yes that is the correct word, addicted, and have been since 2000 and it yes this latest stock plunge hurts.
Short interest has increased over 23% on RIMM as of May 15th putting RIMM in the top 5 of all stocks shorted and so shorts truly control the destiny of RIMM by putting enormous financial pressure for the stock price to drop further, thus forcing RIMM shareholders to sell.
Ouch!
The comment I am replying to directly above is written by a PAID basher/spammer/whatever. It is designed to bash RIM as a company. One internet comment does not matter, but hundereds of these guys posting all over the net can help create/grow negativity.
It seems like it is real, it seems genuine, but is not. They are sometimes hard to spot, except something this guy wrote is a dead giveaway.
How do I know for sure?
"I'm still addicted to my BB, and yes that is the correct word, addicted, and have been since 2000 and it yes this latest stock plunge hurts.'
The first blackberry appeared in 2003
1) A bad quarter--and by the way, the next one will be bad also!
2) Layoffs. I'm surprised that these layoffs haven't come sooner! But I guess the company needs to know where it is going, before it can restructure its personnel.
I predict that the loss will come at the hands of a provision for restructuring--that is usually what happens when mass layoffs are announced. The company will take a charge now against future cash payments to employees when they actually fire them. Currently it is a non-cash expense, but it will be a cash expense, so look for weaker cash flow in future quarters (but not this quarter, unless people have been fired.)
M@
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So, the operating loss looks to be due to some cashless write down or write off, as the company will be free cash flow positive (i.e. operating cash flow huge enough to cover completely big capital expenditures and then more). All of that in a dismal quarter.
Maybe the media and financial whores should devote some minutes thinking of this, before uttering their usual crap.
I'd note also that their subscribers base actually did increase, but I fear to shock all the simple souls who believe US to be the only place on Earth.
The negative publicity on RIM is very severe. Perhaps they brought this upon themselves, that even a flawless BB10 will limit short-term upside. If BB10 gains acceptance you can double your money in 2 years. Even at 200mn loss per quarter and 2.1bn cash that's 10 quarters of running until cash runs out.
The unfortunate staff reduction is expected: Java-based developers on pre-BB10 are no longer needed. The BB10 platform will need developers that are based on another programming language. The BBM and app store staff might be moved to BB10 if the role is not technical.
I am a RIM user and I am not upgrading my phone only to wait for the BB10. So of course earning are revised down. Speaking of iphones or android phones , check this out over a 40 page pdf file to my iPhone clients and when they open it they use a finger zoom to read a pdf or they have an app that reads it not to efficiently. Heck I click on my blackberry key chose view text and voila i read my PDF seamlessly and I can send any page of my PDF via email asap.
They are building a new platform probably the only smart phone company that is beside Micro soft.
According to RIMM's 5/29/12 business update:
1. Cash will INCREASE to over $2.1 BILLION this quarter; &
2. Global customer base GROWS this quarter to 78 million.
Is this the end of the line for RIMM? CLEARLY NOT!
What of the operating loss? Sounds like another inventory write down (i.e. a NON-CASH event). Is this a surprise to anyone? It should not be, we all know they have new phones and a new operating system coming out.
Whatever happens to RIMM in the near future, I'm sure the implied value will be FAR GREATER that the paltry share price it's currently trading at. A big share price jump is coming when a sale, partial sale, or partnership is announced.