First I must disclose I am a University of Waterloo student, so I am heavily biased towards the home team and wish for the best for RIM. Also I am a long time reader, first time contributor on SeekingAlpha, so cut me a little slack if things do not make sense.
With RIMM trading below book, and also being one of the most watched stocks, I do not blame RIM's stock price on market manipulation. People with large amounts of cash are simply taking the Wait and See approach, to see whether RIM indeed has potential to come back, or is it just another value trap.
After disappointing 2012 Q4 earnings, RIM share price plunged 10% before immediately bouncing back to -2%. This recent price action lead me to believe that RIM has finally reached a bottom. The sharp bounce off the 12.50 mark on a 1.4M shares traded indicates a large buyer at that level. This buyer may have also supported RIM 2 days after 2012 Q3 earnings, RIM rallied from 12.52 to 13.78 on 4x average volume (80M shares traded). I do not anticipate this level of support to be broken anytime soon. With -0.25 EPS and 0.8 adjusted EPS reported in Q4, this is about as ugly as it will get.
There are many problems surrounding RIM, the highlights are:
1. Its not only a broken stock, its a broken company
2. No innovation, losing market share, not competitive
3. Like many techs, it will go the way of Palm
4. Stupid management
I agree that right now RIM is a broken company, but like great companies with insane valuations, there's also broken companies with insane valuations, and I think RIM is one of them. Here's some of RIM's upside:
1. Below book value, trade at large discount to past earnings (yes I agree if they only make $1 next year, the stock trades at normal P/E ratio)
2. BB10, significant upside even if RIM just stay relevant
3. Partnerships / M&A are now part of the "strategic review".
Assume that $12.50 is a solid support level, and any news that hint at RIM's relevancy will push RIM above its currently depressed valuations, as well as the reward/risk ratio for large short sellers is diminished at current valuations,
here's the trade that I would make if I had more money:
sell cash secured Dec 2012 puts at 13 strike, so we get paid to wait until the stock pull back closer to the support level, the run up on Friday March 30 may very likely be a short squeeze.
However if there is a sustained rally above $14.50 and the puts were not exercised, which indicates the stock entered a new trading range, I would buy back the puts previously sold for a lower price and initiate a long position via Dec 2012 OTM or ITM calls (if you are really bullish) or via direct purchase of stocks.
Of course this is not a recommendation to buy or sell, I am not a registered investment advisor and everyone should conduct their own due dillegence before investing.
Disclosure: I am long RIMM.