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Guys, keep calm. After/pre market anre strange beasts : as I write this, stock is back at $13.07 on NASDAQ pre-market.
I'd suggest to everyone reading Chrhis Umiatovsky blog entry about the eraning call here : Research In Motion Q3 Analysis and the BlackBerry Roller Coaster | CrackBerry.com
While his concern was mostly about services revenues (namely: BIS), I commented on it, with my thoughts, here they are.
Edit : I wrote this prior to watch Heins interview you might like to see also : http://www.bnn.ca/News/2012/12/20/RI...estimates.aspx
Edit 2 : Hum ... stock down again on pre-market $12.45 (down 11.83% 2 hours before opening)@Chris
Thanks for this insightful comments.
I'm a little balanced here and confused with numbers.
But my thoughts are the following :
1/ RIM is on a "back to top" move. Not "survive". This means that if they succeed - say - take about 15-20% of the consumers market with profitable devices, this will likely fill the revenue hole. Also, and I've not read about it yet, we have to consider the frequency of devices renewal. I believe current frequency is far lower (I mean users keep they BB longer than other brands), for three reasons : The quality of the devices (that can last longer), the lack of real innovation and - as a result - the very common "I hold two devices" situation, where having the latest BB device is nowhere useful. With the offering of new, appealing and up to date devices, a shorter renew period is very likely to append.
2/ Users will decide whether or not they want to rely on BIS for "extra services". My hope is that BBM will be the first (and maybe apart) stack of theses. In that case, emerging countries will not be the last to buy this stack ... better the first. Adding the -rumored- video feature will enforce that both for emerging and mature countries.
3/ The development of BB10 and middle end (BIS) for con/prosumers also has a cost (and I believe a massive one). We might have to consider that in their strategy, with a rapid growth (in my scenario above 3X to 5X, depending on areas), the specialization of the NOC (services cut in stacks, BBM being #1) will lower hardware/network investments costs, so that the - real - balance may not be that much than 1billon if we include this "no need to invest" point.
4/ We don't know yet about future services attached to BB10. At the presentation we has in Paris two days ago, I've been asking about the cloud. "Cant comment on this, but look at the screen"; on the screen: Box + DropBox icons. me: "will there be more ?" the speaker : can't comment on this" ... with a smile and shining eyes. How would they monetize this ? I don't know. but I believe they won't offer it for free.
5/ I use for several months now the MS Office365 cloud solution (with - free - BB Enterprises Cloud Services, meaning free BES-like services) but I can't believe MS is not contributing to this, on a CAL basis. There also, RIM had no clear communication and I believe we'll hear about it the 30th.
You know I'm enthusiastic - and somehow over-optimistic - about RIM's future, so I may paint it all pink or sugarcoat it too much. But I can't believe they have not focused on the services revenue point, while they knew a long time ago they have to deal with it.
As a conclusion, I tend to believe that Thorsten has voluntary not unveiled very important parts of the plan, as current stock valuation is not their problem right now (means almost nothing until BB10 launch, good or bad) and that we'll ear about it the 30th.
In the meantime, should the stock go bellow my avg $10.5, I'll buy as much as my free and available cash can (never more than 15% of my available cash - this is not an advice to anyone, just what I'm going to do - I'm not an expert, etc.).
P.S: I know it's not in your habits to comment in forums, but I'll copy/paste this in the "I support RIM and I buy Shares" news and rumors thread. May be more comfortable to discuss about it.
Last edited by Superfly_FR; 12-21-12 at 07:10 AM.
- 12-21-12, 08:27 AM #1327
Watched Thor on CNBC . Thor said the transition of OS7 to BB10 will be one and a half to two years and that gives them time to move from OS 7 to BB10. RIM is not stopping with innovation or services and so services is not going to stop. It's a non-issue as this may not even effect RIM for another year and a half to two years and the market should only be looking six months ahead. The fact RIM is aware and already thinking about this tells me this is all noise by the shorts. a year and a half is alot of time and many things can happen. If this was six months from now I could understand market reaction of the unknown. This without a doubt is pure maniulation. Who's to say shorts didn't short a few million shares in AH and PM ?
- 12-21-12, 08:28 AM #1328
It is down even a few cents more on decent pre-market volume of over 2M shares (12.27 right now). Still the pre-market is a strange beast and not to be trusted. Unfortunately due to the clowns some of us have in Washington, it looks like the market as a whole may not have a great day. If RIMM can be up in a down market today, that would be a great sign. I fear it will leak further, but ope the after/pre-market drop overshot as it so often does. It sure is a wild ride and not time for amateur hour for anyone playing with money they can't afford to lose. Good luck today!
- 12-21-12, 08:33 AM #1329
I doubt it was any real level of manipulation. You had a lot of bottom fishers who bought cheap and saw 50-100% gains. They got out when their losses fell back to 25-50% or took half their money off the table. That is what they do. Frankly, that's what I do, lock in profits and play with the house's money. Otherwise its too emotional and you "hope" it bounces back. Hope is not an investment strategy I am willing to subscribe to. Shorts are a fact of life. Given RIMM's long and dramatic fall and then quick pop, it a shorts dream. No manipulation, just playing the game that is Wall Street.
- 12-21-12, 09:07 AM #1330
RIMM SP doubled at the same time short interests increased to almost 25% of RIMM share outstanding. To say there is no manipulation tells me you have no understanding of wall street. Do I have to give you examples of wall street crooked and illegal conducts? Many analysts were proven wrong (again) when RIMM gave ER as they easily beat the street. The short interests want to make noise about something that will MAYBE effect RIMM in 1.5-2 years. If it was six months from now I could understand.
- 12-21-12, 09:18 AM #1331
Respectfully, I think I get it. Look at my posts here, all of what has happened was VERY predictable in any stock, and especially in RIMM. When a stock doubles as quickly as RIMM did, shorting is EXACTLY what many experienced investors will consider doing, in ANY stock. Shorting stock is not "crooked and illegal". Yes, there are occasionally people who scheme and defraud. However, most play by the rules as they exist. Do you have any actual evidence of improper conduct? You can fault the rules or say shorting or high frequency trading shouldn't be allowed, but it is all perfectly legal.
EDIT: RIMM is below 12 at 9:20. No surprise there. May be a pop, may not, but blaming the shorts seems a bit silly to me.
Last edited by OMGitworks; 12-21-12 at 09:20 AM. Reason: update on stock price
- CrackBerry Addict
12-21-12, 10:13 AM #1336
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I feel like this is being manipulated by big hedge funds so they can let all their buddies get in at a lower price. They see the potential in rim and are pissed they missed out on the initial run up so they try to spin a positive earnings release. They are releasing these bogus downgrades to knock the share price down. I wouldn't be surprised to see this thing finish closer to the 13 range today. Don't panic and use this opportunity to pick up more shares/calls at a discount.
- 12-21-12, 10:18 AM #1338
Concern over service fees is not a new discussion. If you have been reading Chris' contributions on the front page recently and listening on the podcast it's been a topic he's brought up time and again.
I know in the USA (others can chime in around the world) that the 2 majors are moving their users to shared data plans - where you buy a bucket of data and then link lines to it at $30 a pop. Right now - and I can speak to this directly because I have AT&T plan like this with Android phones and BlackBerries, AT&T make all $30 from the Androids, but less on the BlackBerries as AT&T pays out of the $30. So, as far as AT&T is concerned - which phone do you think they would their users move to - iPhones and Androids where they make all $30 or a BB phone where they make less?
Right now RIM needs 100% carrier support and the only way they can get it is to transition the fees to a direct pay method where the carrier isn't involved - or the services become cost plus items from the carriers so that BB's are the same profit center the other 2 are.
Then it will be interesting to see if consumers will pay for these value added services. This is a challenge for RIM right now.
- CrackBerry Abuser
12-21-12, 10:19 AM #1340
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Regardless, if you hold the view that shorts should be illegal and are generally a crooked way to invest, then you might want to rethink individual stock picking in favour of more diversified investments.
- 12-21-12, 10:26 AM #1343
It's tough to hold a meaningful conversation with somebody who doesn't even understand or accept basic facts. Short selling is not illegal. Here's a good summary from Investopedia.
Last edited by notafanboy; 12-21-12 at 10:46 AM.
- 12-21-12, 10:56 AM #1344
Relying on Cramer, a former Goldman Sachs employee, is not going to help your case with most/many educated investors. You realize Cramer sells his stock picks thru a newsletter and other devices and then goes on the the air and rants raves about the same stocks. He does disclose the "conflict" and there are some waiting periods for trades, so it is perfectly legal, but his level of "enthusiasm" and the fact that many think he is wrong MUCH MORE OFTEN than he is right seriously undercuts his reputation with some. Personally my opinion is that he is no better than the shorts and those at Casinos that bet with the house at the craps table, perfectly legal, but something I wouldn't do. Entertaining, absolutely, but I seem him more a a counter indicator that a leader. Of course, YMMV.
- 12-21-12, 10:59 AM #1345
Everyone knows shorting is legal but the question is should it be illegal ?It's funny how the criminals want to bend the rules when they see fit by banning short selling
Naked short selling - Wikipedia, the free encyclopedia
SEC Halts Short Selling of Financial Stocks to Protect Investors and Markets (Press Release No. 2008-211)
Spain, Italy Ban Short Selling to Slow Market Turmoil - Bloomberg
- 12-21-12, 11:10 AM #1346
Please don't think that I don't think some people and firms bend, brake and turn the rules on their heads or that they don't legally (and illegally) manipulate the markets. Shorts do serve a useful purpose. To get back to the original point/post, I think it is highly unlikely that a sell-off of this magnitude is the results of shorts manipulating the market. They "bought the rumor, sold the news" on the earnings report and the confirmation that the RIMM lost 1M subscribers and that the service fees which were a great source of steady income, coupled with the uncertainty of BB10, an "all in" strategy made reasonable investors, some of whom had large short term profits at risk, nervous. Maybe I am naive....
- 12-21-12, 11:50 AM #1350
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