It seems appropriate
CCR
should be the house band for Research in Motion (
RIMM
,
quote
). There is "a bad moon on the rise" for the Canadian smart phone
company that threatens to eclipse all its operations.
At first, it did not seem that it could get any worse for RIMM
than the poor reports in the press about the Blackberry 10, its
new smart phone Operating System that was supposed to rival the
iPhone 5 from Apple, Google Android (
GOOG
,
quote
) products from Samsung (
SSNLF
,
quote
) and Microsoft's (
MSFT
,
quote
) new Windows Phones.
This not the type of competition against which comebacks are
easily mounted. For that type of rebound, RIMM can never
seriously err in order to gain traction and impress the investor
community with its new smart phones.
Never say never.
It has gotten worse for RIMM: much, much worse. In the words
of one analyst,
the company is facing "disaster
."
Disaster is the name of the long awaited Blackberry 10.
The company recently announced the introduction of Blackberry
10 would be delayed. In addition, massive layoffs were also
announced. As a result, RIMM's share price has fallen 17.78%.
Year to date, RIMM is down 48.34%.
This inevitable decline for RIMM
was reported back when the stock could still jump on good
news.
It does not look like there is much good news ahead for either
the shareholders or employees of RIMM. It has been trying to sell
itself since last year -- there have been no buyers. There will
be even less interest with the Blackberry 10 not coming out and
the iPhone 5 hitting the market soon. Investors now prefer to
wait for a company to go into Chapter 11 and then move on the
prime assets as values generally decline. That certainly seems to
be the story for RIMM and its long suffering shareholders.
It has been a very pleasant summer however, for those holding
a short position on RIMM. At present, the short float is now
15.56%. A short float of 5% is considered to troubling for a
company. For the last 52 weeks of market action, Research in
Motion has fallen by 74.11%.
Except for those short, the future does not appear to be very
profitable for those with a position on RIMM. On a quarterly
basis, sales growth has fallen by 42.67%. For the same period,
earnings-per-share growth is down by 174.58%. Earnings-per-share
growth this year is off by 64.95%.
There is still some support for the company:
RIMM was upgraded by JMP Securities
on May 30. Since that upgrade, the stock price has fallen by more
than 30%. With the Blackberry 10 debacle, it would seem RIMM's
share price is headed in only one direction.
