Shares of Research In
Motion Limited (USA)(NASDAQ:RIMM) ultimately got clipped on Tuesday after eight
successive sessions of profit that goosed the subjugated stock price of the
Blackberry smartphone manufacturer by about 43%.
RIM shares were last
down by over 10.52% to $0.72, leaving them with a health gain from the stock’s
$8.50 trading range two weeks back. The profits have been driven primarily by
more positive commentary from analyst of the Wall Street on the strategic
launch of the new Blackberry 10 OS and smartphones that are expected to happen
in the February and March months of 2013.
On the other hand, a
few negative comments came to notice on Monday. An analyst from Morgan Stanley,
Ehud Gelblum reiterated his Underweight rating and $7 price target on the stock.
In his note to clients, he mentioned that the stock is ‘un-investable in the
near-term’, considering the uncertainties that the business is facing.
Gelblum said that
Morgan Stanley still believes that BB10 does not have much chance of achieving
success. He included a comparison to the webOS that was released by Palm in
2009, which had won high marks for innovation but somehow failed to get much
share in the smartphone market eventually.
Kevin Smithen from
Macquarie Securities also took note of the latest run on the stock in a note
that was issued on Monday. His take was comparatively positive, quoting his
standpoint that the stock has oversold with predictions far too low on
estimates for subscriber losses and flow of cash. He said that with the shares
now nearing $12 based target, Macquarie Securities is becoming slightly more
careful with the name.
A couple of analysts
suggested that $17 may be a high-level value that can be expected from the
stock, considering a successful launch of BlackBerry 10 OS.
RIM will update results
for its third quarter on 20th December and they will not cover sales
of BlackBerry 10 devices. However, they will specify whether the company has
been capable of holding on to its subscriber base and flow of cash before the
launch.
You forgot to mention a subscriber base of only 80 million and growing. Not bad for a company that is considered dead in the water with over 2.4 billion in the account and counting..
ReplyDeleteYour forgetfulness is forgiven
Gelblum fails to understand that Palm failed because they ran out of money when they launched webOS. Without any money to market and support the development, it died.
ReplyDeleteRIM has over $2 Billion in cash, no debt, and a growing subscriber base. It will be able to go through at least 2 quarters before being in trouble (if not does not generate positive cash flow during that time).
Morgan Stanley analysts need more analysis. But their credibility is suspect as Morgan Stanley themselves had to have a $108 Billion bailout (the most of all banks) in order to survive.
On target with the 108 Billion comment above, if my investment planner need a $1.08 bailout I'd fire him and never listen to another word he said, Sorry M.S. you lost your street cred a long time ago ol trout
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