RIMMberrrr - Redux (-20% from AH Highs)

Tyler Durden's picture

With every man, woman, and child now firmly aboard the 'RIMM is back' bandwagon, the squeeze in after-hours trading appears to have had a 30-minute half-life. It seems the Blackberry-maker just can't get a break. Two words "iconic" and "Kodak" come to mind... RIMM is now -9% on the day, after being up 4% at the day-session close and up over 13% on earnings news... oops. Paging Eric Jackson? Or Jimbo?




RIMM -20% from after-hours highs


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DMA's picture

fat finger ?

Lost Wages's picture

Herbalife is now Herbadead and RIMM is getting rimmed.

Cdad's picture

Nice markets.  Truly stable.  Great price discovery mechanism.  I'm sure investors can't wait to jump in...seeing this kind of absurdity.

Welcome to the 100% electronic Pachinko machine.  Take it away Jim Cramer...

slyhill's picture

Yea, what a face-rip. Form some reason it remindes me of Abs0lute P0ker dot com. Bunch of inside cheaters making good money. All they needed to do was not be stupid. They couldn't do it. They started to deviate too far from the mean and got busted.

Conman's picture

Huh, since when did stocks reflect earnings and stuff? Housing recovery! QE! LOUD NOISES!

Mark Wilson's picture

Did BAC close at its 52 week high today? Why yes! I do believe it did. :)

Careless Whisper's picture

Worth every penny. Maybe you want to invest Granny's life savings in that fine institution?

DMA's picture

Well, at least they beat the estimates. 

orangegeek's picture

RIM is toast.  Give it a year, maybe two.

Plausible Deniability's picture

I am a dedicated zerohedger and agree that this market is nuts. However, one of the FEW stocks I have bought in the last 6 months is RIMM (I have my clients about 70% cash equivalents 15% gold and 15% equities). RIMM is not going to get back to where it was, but very few people have done their homework. As bad as their phones currently are, they are still popular in Asia and are Huge in South America. They are selling around 8 million units per quarter. People still love the BBM feature. The VAST majority of the one time charges are severance packages. They have gotten much leaner. They can sell the new BB10 (which actually looks pretty good) for 100-150 less than comparable droids, 250 less than iphones, and if they just maintain their current market share, do nearly a billion in earnings per quarter. That figure assumes that costs of production on BB10 are about 40% more than previous generation phone. Everyone is missing the mark here. They wont get back to where they were. But, they only need about a 6% market share of the smart phone space to justify a $40 stock at an 18-20 PE. Check it out. I dont want to buy and hold for the next ten years but it looks like an easy double in the next 6 months.

Cursive's picture

@ Plausible Deniability

Good points excepts for:

justify a $40 stock at an 18-20 PE.

I would be more worried about justifying an 18-20 PE than using it to justify a stock price.

Plausible Deniability's picture

I hear ya. So make it a 13 PE. If they drop 1 bill in profits for a quarter, the "Rise from the ashes" story will get hyped beyond all logic and I think a 20 PE will get passed easily as people will look to their numbers from a few years back for guidance going forward. This, of course, will be a huge error as I dont believe they will ever get close to where they were for some of the very reasons listed in the other repsonses. My whole point is that they dont need to. A 6% market share is almost meaningless in that market but it will run their stock a helluva lot higher as they dont have one cent of debt. Every dollar falls right to the bottom line. Additionally, they just signed up a big government agency (Homeland defense, immigration, I'm forgetting which one) for a pilot project based on some of the new proprietary features of BB10. Ride the wave up. The minute the talk of the "Return of RIMM" starts and that valuation skyrockets, dump it.

adr's picture

Where are you getting that RIM can sell BB10 devices for $100-150 less than comparable Android devices? Are talking about unactivated full price or carrier contract price?

You can get one hell of a good Android phone like the Sony Experia range for $1 on sale and $100 any day of the week. GSIII phones are everywhere for $50.

The biggest problem with BB10 is that the handsets are completely abandoning the Blackberry concept. The full touchscreen Blackberry already came out, and is much of the reason why RIM is circling the drain. Nokia is only still a player because they abandoned symbian and embraced Windows Phone. South America and Asia are behind the times a bit, but are being inundated with low priced Android phones grabbing marketshare. BBM does work well for people that do not have other more robust e-mail services available, but with Gmail a BBM account really isn't necessary.

BB10 will be similar to Palm's attempted renaissance. The Pre and it's OS were actually more advanced than Android and iOS and the hardware was fantastic. The problem with Palm and soon RIM is that Blackberry World will not be able to offer the same level of content as the iStore or Google Play. Something that is severely limiting WP8 right now.

I always liked RIM, they're Canadian and made great hardware. But, they have lost too much talent during the downsize and the corporate exodus continues. They should go private and forget about shareholders. Then they can concentrate on rebuilding a niche brand. They may have a future, but not as a publicly traded monstrosity. Good luck holding the shares. If you sold shares of Kodak you bought when they went bankrupt at the right time, you would have made a killing. Of course if you held a day to long, you lost it all.

Plausible Deniability's picture

First off, I dont disagree with alot of what you are saying. However, you have to understand the way the industry works. Even if you buy a droid for $25, that is a carrier subsidized price. That is precisely why ATT revenue jumped when exclusivity deal ran out on iphone. The carriers are pumped about bb10 and are going to push it much harder than people think. They are getting squeezed between droid and apple and need a third option.

Also, this company is anything but a monstrosity and not comparable to Kodak at all. Go look at the balance sheet. They 2.3 billion in cash and not one cent of debt. The new phone is coming out in complete touch screen and traditional BB model. Go look at the demonstration on Youtube. It actually looks pretty good. I agree with you. The optics are bad. But get over it and crunch the numbers. They only need a 6% market share to do between 4-5 bill in net revenue.

monoloco's picture

Why would RIMM ever enjoy an 18-20 P/E when AAPL only rates about 10?

PaperWillBurn's picture

Glad I bought $14 Puts.


Where in Asia are they still selling?  They used to sell buckets of them in Thailand a couple of years ago..hardly anyone uses a BB in Thailand anymore

chump666's picture

They're done. Dec 24th it gets booted from the Nasdaq. Tech sector looks bad, game companies going bust, social media companies over-hyped behemoths, netflix etc etc etc.  With the crowded HFT trade on the Dow and S&P, will be interesting to see what will prime a non news sell off/volatility.  Could be Nasdaq shorts

DMA's picture

Jim Cramer about to flip flop again tonight.  on RIMM. 


tawse57's picture

Will this take NOKIA down as well - both are still struggling big time and the decline in AAPL is probably - amongst several reasons - indicative of people just not buying new smartphones en masse.

Partly this is due to the recession - people do not the money. Partly this is due to the fact that if you bought a phone in the past 2 years it pretty much does anything you currently want it to do. I think the mobile phone market is quickly following the PC market into a commodity market.

Bay of Pigs's picture
RIMM Reports Loss but Beats Expectations; Share Jump After hours  
hannah's picture

EVERY and i mean EVERY corporate client i know that could flip from rimm to apple did back on iPhone4....they will not go back to rimm. they have bought the apple pr fanboi craze and went to apple products.......and it is all i hear all day is how great apple is. personally i would go with samsung galaxy.....

Cursive's picture

Waiting for a similar pattern to befall the SPX.

chump666's picture

Gold/Copper gets smashed yet the ASX200, with a rallying AUD, goes parabolic!

2013 Maya style


Frastric's picture

My short position... SAVED!!! God bless you algos!

Silver Garbage Man's picture

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