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RIM (RIMM -21.2%) has added to its losses, as worries about the impact of BB10's services...
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Friday, December 21, 2012, 2:09 PM ETRIM (RIMM -21.2%) has added to its losses, as worries about the impact of BB10's services pricing mount. Goldman, which upgraded RIM to Buy last month (I, II), suggests investors are overreacting, since BB7 won't be affected. But Deutsche is less sanguine, forecasting RIM's service revenue will fall 20% each of the next 2 years. Ditto CLSA, which is "downgrading" shares to Sell from Underperform. "RIMM’s business model is being challenged by operators that are unwilling to both subsidize devices aggressively and hand over a slice of their data revenue." (transcript)
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This news story has 15 comments:
RIMM had more tham doubled in 6m on virtually no real news. Time to take those profits! Hence, the selloff makes sense, albiet for bs reasons.
My target here is $20 prior to BB10 release data. If it's a flop, it's obviously a bailout at anything over cash/share, if it's a success, $50+ share is not out of the question.
You should play in casino rather than investing on market.
The market has realized that there is a lot of upside potential in RIMM- now what is the % chance of success? You say 0%? Then RIMM is probably worth around $9 to you. Also, how do you define success?
Capturing 5%+ of the US smartphone market would be huge- yes the % is much lower than it was in 2008, but the total base is exponentially larger.
If you prefer to go long AAPL, you've been given a near $200 haircut opportunity, if you prefer to short RIMM, at least you'd be making a better choice than those guys last summer.
We'll see how this plays out, best of luck!
Now I'm long NOK and I was short AAPL till this week. Both worked pretty well. I invested in RIMM in September at $6,60 and sold at $11,80 a couple of months later. To be honest I was very surprised of that rally and I think that RIMM doesn't worth that much, that's why I sold.
I would define BB10 success as RIM selling 20-25m BB10 devices worldwide and signing 1-2m new corporate service contracts. I honestly don't know what the rates of BB10 success are, since I didn't even see the finished product. The only thing that I know is that they are quiet late with the release and that they are out of cash to fix BB10 if something goes bad, or to launch a high scale promotion. If it's a failure I'd say that $9 a share is clearly a scam. It would never worth that much. If it's a success described above the share might soar at $20-25, but certainly not $50. Who would pay that much for a struggling tech company with just $950m in cash? They barely have enough to commercialize one single product! It's a double or nothing configuration here. Either they make it with BB10 or they fill for a bankruptcy. That's clearly not wise to advice people investing in RIM! I wouldn certainly not take that responsibility.
I don't know if you realize it or not, but the whole RIMM rally was clearly based on takeover odds. Now that RIM failed its Q4 the speculations will be even more intense. You can only speculate about how much other companies might offer for RIM. Anyhow, I saw only one BB10 touch device, it was made of cheap plastic and I wasn't really impressed. Nevertheless the corporate features that BB10 has to offer on paper (don't know what we are going to get at the end) are clearly very interesting, so if RIM concentrates exclusively on corporations and businessmen, they might make it eventually. Not one single high-end Blackberry could capture any attention of the large public, or of teenagers. So maybe going back to basics will be the key.
Do some research, there are many US companies still using BB's. That's a bold prediction, I will join you , highly unlikely that RIM will trade north of $140. LOL