RIM Is Still A Turnaround Story
Once again, a positive (yet balanced) article at seeking alpha.
RIM Is Still A Turnaround Story - Seeking Alpha
[...] The company has stated that the second quarter will show a loss. I would also expect losses in the third and fourth quarters.
However, if the cash management remains stringent, I would expect RIMM to have at least the same cash position 9 months form now, when the new phone is released. This is dependent on sales stabilization at the lower levels, that have just been reported. To be confident of this stabilization, I will need to see the level of sales in the next quarter. I would add that it would be unusual to see a company's sales crash further, once a 33% decline has been reported, but anything is possible. If this assumption is correct,
the company will have ample cash to promote and finance the new phone. I also think that delaying the new phone, to ensure that it works well and without hitches, is a good idea. I would however become concerned if the launch were to be delayed further.
The old management has clearly been ousted and Thorsten Heins is going about restructuring the business. The ultimate success of the company rides on the new phone, as it has for several months. If the new phone proves to be a doozie, the company will fail. On the other hand, it is clear from the above financial statements that the company will be able to finance the new phone.
If it is a good product, it will bring RIMM back to profitability.
There have been several posts regarding the break up and takeover values that RIMM might command. I am not interested in those values.
RIMM has had a strong position in the technological side of mobile phones, but has had management that completely lost touch with reality. I have become a shareholder (albeit way too early) as I am hoping that the company still has a good technological basis for their phones and now has a focused and effective management. I originally bought the shares as a turn around position, as I assumed that the launch of the new phone would be in September 2012. As the launch has been delayed, my purchase has proved early and wrong. I am hopeful that this will not prove a fatal mistake.