August 28 is a Key Date for RIMM Fans

I hang out on StockTwits a lot.  It’s a great community for active traders.  A large majority of the people I follow are technicians – head and shoulders, wedges, gaps and all of that good stuff.  I love technicals, but I incorporate fundamentals into my analysis as well.  I am not really into the traditional stuff – like PEs, Price Sales, Book Value, but I am more of an market observer.  The old Peter Lynch stuff.  Is there a buzz when you walk into a store? Are people standing in line for days to buy a product?  Is a company’s parking lot packed after hours?

I realize that is “touchy feely” stuff, but incorporated with technicals it gives me an edge.  Research in Motion’s March earnings call was a great example.  The technicians were all pumped up as RIMM’s stock price moved into the gap.  Calls for $82 were very loud.  Thanks to Morgan Stanley’s internet report – I stood my bearish ground.  The report encouraged the use my observation skills as well as my experience from the transition of Mini-computers to Personal Computers.  I have written about this numerous times (My RIM Rant).

RIMM laid another earnings egg and was taken to the woodshed closing down nearly 11% on Friday.   I listened to the Company’s Conference Call and it was pitiful.  Here is how the CEO answered a question on how RIMM would respond to the competitive threat from Apple and Google:

Be careful about you implicit assumptions in your question, or shall I say your explicit assumptions in your question. Yes, I think you guys will just have to watch and see what the plans are. I think there’s a lot of implicit and explicit assumptions that maybe should be examined. Part of that is the question of how much does — how powerful is their innovation is a good question. What’s the timing of it is a good question.

What?  The Reformed Broker said that he was speaking in tongues.  The analyst agree.  I have never seen so many downgrades following a call.

Personally, I believe RIMM days as a high flying stock are over.  They missed the turn.  It happens.  It’s a part of business.  This remains a contrarian opinion which is fine by me.  The Bulls need a catalyst and the Microsoft buyout rumors are already floating this weekend.  Microsoft just went through a brutal failed takeover attempt with Yahoo.  Why try another?

The next two months are make or break for RIMM – their savior phone and OS are scheduled to be released this summer.  For their stock’s sake, both must come out before the last day of their current quarter August 28.  The earlier the better.  The market needs to see the phone and more importantly customer’s reaction to it.  Also their revenue and earnings guidance is based on percentage of sales from the new products.

If the phone slips schedule it will be time for the RIMM fans to start learning to live without their beloved keyboards.  It was cool in its day.

My Long Apple Short iKillers Strategy continues to work.  Since I began tracking it here on 5/6, it has out performed the NASDAQ by 14.1%.  LASiK  +10.0% vs. NASDAQ -4.1%.

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  • $RIMM did indeed miss the turn – 'savior phone and OS' sounds like $PALM – and look how well that turned out. Good stuff.

  • Thanks, the RIM/PALM parallels are interesting….

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  • Goldner

    Very interesting , I saw this coming back in 2007 with the first launch of Apple, The only edge Rimm had holding them up was the fact they had they business crowd.. Iphone at that time was an entertainment device. Not any more…Apple is on a one track pace to collect the business, entertainment and younger generation crowd. THE GENUIS is this…We parents buy a new Iphone guess who gets the used one? The kids…makes a nice Ipod when you pull out the sim !!!!!!!!! All 3 of my kids now have the last generation Iphones …They lost all interest in their Wii and playstations.. They only want those APPS…WOW movies, apps games all in one!!!! What a fantastic babysitter. So as the younger generation gets hooked on Apple so will the business crowd. Most of My spouses company have dumped their Blackberries and went to apple ! People in line for the IPhone were old Blackberry users going for their first Iphone! Im sure Rimm will come out with some neat~o device to try and complete but Im sure it will be like MSFT's ZUNE! Remember the ZUNE ? LOL
    One thing I observed is Rimm like many tech companies over flood the market with to many models, to fast..They should focus on 1 spectacular product like Apple does and grow it. On the Rimm call the CEO kept mentioning all these new models coming and it had my head spinning!!! They need to just brand one and leave old technology behind! I think Rimm is done as a high flyer, they sat around way to long and let the competition take over! Once that happens its pretty much BYE BYE! Very hard to make a come back
    Great blog, thanks for letting me share my view…… I agree with your article totally !

  • RIMM was a little too cozy in its pre-2007 world schmooze the carriers. Consumers now rule. Thanks for commenting.