Evan Grey Owl

Will RIM's Gamble Pay Off?

Don't confuse the effects of market manipulation with the value of a company. By my simple-minded calculations, Rimm was trading roughly around $100 in the weeks before Q2 earnings report. Loss of $30 per share on 565 million shares suggests that wealth in the amount of roughly 16.95 Billion dollars was re-distributed under the guise of 'market reaction to a disappointing earnings report'. Well, I don't buy it and this is one of several cases this year that point to market manipulation. Maybe a 10% drop would have been justified short-term, especially with the economic back-drop. But what is going on seems like a large holder or very large holders fixing this in advance. And if these analysts are worth their salt, where do they get off changing their stories overnight? Didn't they have any basis in reality for their numbers in the first place? Downgrades en masse can tank a stock. How does it profit the analysts who exaggerated expectations in the first place, to severely punish a company with a public downgrade because the analysts' numbers were wrong? The results were mostly in the range RIMM previously indicated. Becoming hysterical about small misses looks awfully like a gimmick to acquire shares at fire-sale prices. Let's keep an eye on the data and see where the biggest selling originated, when the Sept. 30 data become available. And then where the biggest buying originates at these 70's or even 60's levels. Our congress sure is right about lack of regulation.