Herb Greenberg calls chatter kickstarted by Piper Jaffray's Gene Munster on a Research In Motion...


Herb Greenberg calls chatter kickstarted by Piper Jaffray's Gene Munster on a Research In Motion (RIMM -5.1%) bankruptcy absurd given the tech firm's balance sheet and cash flow.
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Comments (11)
  • Josh Krause
    , contributor
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    I completely agree. More likely chatter is to get a better price on a buyout.

     

    The company has no debt, $1B in cash and is still profitable (for now).
    3 Apr 2012, 11:18 AM Reply Like
  • wapiti
    , contributor
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    If you think RIMM has balance sheet problems, take a look at high flyer TPX? Debt/assets 70% Debt/Equity 1900%

     

    Huge Insider selling 52 week high though!
    3 Apr 2012, 11:21 AM Reply Like
  • Castrese Tipaldi
    , contributor
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    Maybe poor Gene could explain how a company without debt and earning 600 mln $ cash form operation last (dismal) quarter can go bankrupt.

     

    Some SELL rating going awful at Jaffray probably....
    3 Apr 2012, 11:53 AM Reply Like
  • Justforfun7
    , contributor
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    thats actually 2 billion in cash now...
    3 Apr 2012, 12:45 PM Reply Like
  • fatt
    , contributor
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    USA has the most debt in the world, why USA can not go bankrupt.
    3 Apr 2012, 02:06 PM Reply Like
  • gustavitt
    , contributor
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    Good on Herb for calling him out. Talk of bankruptcy anytime soon is absolutely illogical.
    3 Apr 2012, 07:08 PM Reply Like
  • DougRk
    , contributor
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    Guess I'm alone in the comments here. The question posed to him was, "In a world of $1000 AAPL, is there room..." To which the obvious answer is no.

     

    Even w/o $1000 AAPL, RIMM is headed toward bk. The time for a buyout was _before_ the acquisition of QNX and move to BB10. It's too late. A buyer would have to agree with that strategic move, which is highly doubtful at this point.

     

    The revenues longs like to point to are illusory. In that they're so fragile at this point of the BBM life cycle.
    3 Apr 2012, 11:47 PM Reply Like
  • DougRk
    , contributor
    Comments (1901) | Send Message
     
    http://bit.ly/Ho8xzA

     

    From the above:

     

    "For the first time in seven years, RIM lost money, $125M; revenue is down 25% from a year ago; unit volume decreased by 11% from the previous quarter. The only somewhat positive sign is that cash increased by $610M leaving RIM with $2.1B in its coffers, a fact preeminently featured in their press release. The message is clear: Look, we’ve got plenty of cash to last us until “late 2012” when we’ll be back with new BB10-powered smartphones.

     

    This is a dubious proposition.

     

    RIM will undoubtedly undergo another two or three quarters of marketshare erosion and losses. Last quarter’s combination of positive cash flow in spite of losses can’t be repeated indefinitely, there’s only so much inventory you can liquidate—at a loss—before you see the bottom of the cash register."
    4 Apr 2012, 12:29 AM Reply Like
  • pat50
    , contributor
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    Dont laugh. My husband believed the bankruptcy comment and the numerous air times on CNBC that did not dispute it. After Bear Sterns and Lehmahns-who can blame him. He wants to know CAN YOU SUE Piper Jaffrey and the analyst or CNBC for constantly saying it is going bankrupt?
    4 Apr 2012, 08:21 AM Reply Like
  • Josh Krause
    , contributor
    Comments (1356) | Send Message
     
    It makes much more sense that the market is beating it down to get a better sale price for the buyout.

     

    The barrage of negative news that we are getting is forcing it down to a more attractive price for a buyout.
    4 Apr 2012, 08:23 AM Reply Like
  • DougRk
    , contributor
    Comments (1901) | Send Message
     
    Possible, but I think more likely the market is smart. What are the drivers for RIMM? Solely the gamble that BB10 will gain traction. Would you bet that _any_ company can enter the smartphone race at this point and be profitable? Android and iOS are awfully entrenched, with a combined 90% in mature markets.

     

    I'm long Samsung. And NOK--- which is my bet about someone becoming the 3rd OS. RIMM is worth a shot around $4 or $5, based on the collateral of their meager patent portfolio. Likewise I held off on NOK until it dropped in the range of their substantial patent collateral.
    4 Apr 2012, 11:13 AM Reply Like
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