RimRocked (NYSE: RIMM)

NEW YORK - Shares of Research in Motion are down over 8% today as investors got rimrocked. Rimrocked is when someone climbs down a mountain and soon realizes he has no place to go up or down. Investors may feel that way today. The company announced a Christmas surprise this morning as investors could only expect a lump of coal. Blackberry did one worse, they will charge off $360 million after tax of its struggling playbook inventory. The playbook is the tablet device that has failed to sell. The device maybe sold 200,000 units in their last quarter compared to 10 million for Apple.

The charge-offs may be just getting started. Research in Motion is charging off inventory which is obviously being done so that they don't have to show low profits over the next year and they can just say it is a one time loss. It is fairly rare for a company to charge-off inventory as excess inventory usually goes through net income in less than a year. Obviously RIM wanted to make sure 2012 earnings look better as playbook inventories would weigh throughout if they had not done this. This is not really an accounting trick, technically inventory is supposed to be marked down to the lower of cost or market value so RIM did the right thing according to GAAP. However the marking down of inventory is rarely done in practice. Second why are they not marking down their intangibles then?

Another loss in the future that RIM may take relates to its intangibles which are over $2 billion. This is almost more than Apple, Microsoft and Google's balance sheet intangibles combined. Considering declining sales and profitability the intangibles should be subject to a massive impairment possibly to $0.

RIM expects adjusted earnings of $1.2 a share or $670 million. Considering the company's business is not that seasonal these are strong results seen for Blackberry. Investors are worried that RIM is now getting all of its sales from poorer countries and its market shares are declining in more affluent countries and exploding in places like Indonesia. The launch of the blackberry last week caused a small riot there. In Jakarta blackberry may be seen as luxury today but over time it would be better if their appealing products sold in wealthier countries as opposed to third world countries. Kodak is also seen as a luxury products in those countries. It is far better to be able to sell to those countries but be able to sell in the main markets as well. This unhealthy model may continue to put pressure on RIM shares and most importantly profitability. As rim is being seen as a substitute smart phone player. The problem with this is that Android, Google's operating system is so broad that this position is also unlikely sustainable.

Will RIM find its way back up the stock mountain? Will it continue down? Or is it Rimrocked and stuck at this price for the next while.