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RIMM time for a takeover?

|Includes:BlackBerry Ltd. (BBRY)


Since reporting earning on March 24th, RIMM stock has done nothing, but decline. The stock has retraced 18% from the high of March 24th.  The company is best known for there blackberry phones. But now they are also entering the tablet industry. Recent reviews of the Playbook have been unkind to say the least. One of the problems noted with the Playbook is that emails can only be received when connected  to a blackberry device. Not the type of reviews you want out when your biggest competition is Apple. Apple has cornered both the tablet and smart phone market with the ipad and iphone. Surely, RIMM is losing market share to Apple and other smart phone makers. Shaw Wu an analyst with Sterne Agee wrote a note to investors saying, “We continue to believe [RIM’s fiscal 2012] guidance of $7.50 in EPS will likely prove aggressive,” and is looking  at estimate “substantially below $6.75” a share. Currently RIMM trades at 8.5x P/E. If there earnings per share come in at $5.00 a share which would be a huge miss for the company. Your looking at a stock worth $42.50. Which is my price target for RIMM. There are road blocks ahead for the company to overcome. Their smart phone business is being challenged by other competitors. Recent reviews of the Playbook may indicate a loss for this business segment.  Maybe the best thing for RIMM stock is a takeover bid. There were rumors of RIMM being a possible takeover target, back when the stock traded at $42. It is likely, that over the next few days RIMM will continue to trend down barring any good news from the company or analyst. The best product they have is, the blackberry messanger and that is not even a product just an app.


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Stocks: BBRY