Research In Motion ( RIMM , quote ) surged almost 10% yesterday but is still down almost 10% for the week -- and is indicated to open lower again this morning as enthusiasm about a possible buyout proves short-lived at best.
As detailed on emergingmoney.com in the article, " Nokia is calling out for help, but is RIMM the answer? " the "synergy" for combining two stocks off about 50% and 80% -- Nokia ( NOK , quote ) and RIMM, respectively -- is not exactly obvious enough to get lenders to finance such a deal.
Don't expect the kneejerk bounce to last: mean reversion trading will bring Research In Motion back down. As it is, there is a short float of 8.44% for RIMM, and as you know, any short float above 5% is considered to be troubling.
Take a look at Sprint-Nextel ( S , quote ) for an example of how short these sentimental bounces can be -- and how fast the market mood can turn.
After the announcement that the AT&T ( T , quote ) bid for T-Mobile was finally over, Sprint-Nextel (S) rose on Tuesday, as called on www.emergingmoney.com . But mean reversion trading had Sprint-Nextel back down again, today.
Sprint-Nextel is off more than 40% for the year. Earnings per share growth is down this year and expected to be off again next year.
The company is loaded with debt and it is years until any benefits from getting the iPhone 4S on its network will accrue. There is a short float of 3.64% for Sprint-Nextel.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.