This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

How to Put RIM Out of Its Misery

Stocks in this article: RIMM SIRI

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

"There is winning and there is misery." -- Bill Parcells

NEW YORK ( TheStreet) -- If you have been an investor in beleaguered tech giant Research in Motion (RIMM)over the past couple of years, it is safe to say that you are feeling pretty miserable. If you're not feeling some form of misery then you are probably not paying attention. Better yet, I would like to hear from you so you can share your coping strategies because as the quote above from legendary coach Bill Parcells states, there is no middle ground between winning and misery.

It's a foregone conclusion that RIM has lost its fight with Apple (AAPL) and Google (GOOG) over the smartphone and devices market -- a market that by all accounts that it perfected after trouncing Palm in the same manner that it now finds itself. What is the silver lining and can it recover?

These are the most important questions to consider when mulling over RIM as an investment. But the company, by its own admission has no idea what its next good idea will be. Remarkably there are many who now wish to proclaim that the company has become cheap by virtue of its recent close of $12.89. But solely from the standpoint of valuation, I remain unimpressed by any perceived value that may be hidden within the stock.

Investors need to understand what exactly is going on with this company and realize that the prudent thing to do is secure any profits and/or prevent any further losses that may be around the corner. Another way to say this is to quit while you're ahead. The fact of the matter is, even at $12.89 the stock yet remains expensive from the standpoint of its rapidly diminishing market share not only from Apple, but embarrassingly, from Nokia (NOK).

When considering RIM, investors need to ask themselves, at what point will the market not only realize that RIM has no business trading above $10, but even worse, the company has no business. I really don't see a scenario where the stock will not drop into the single digits at some point this year unless it gets acquired by another firm. For further confirmation of this, one only needs to look at the results of the company's recent quarter. I would have called it a disappointment, but except (from me) not much was expected.

The quarter that was

In the company's first quarter 2012 earnings results it reported revenues of $4.2 billion -- a number that represents a drop of 19% from the previous quarter. RIM attributed the decline to decreased BlackBerry smartphone shipments falling from 14.1 million in Q3 to 11.1 million in Q4, as well as a higher proportion of lower ASP products in the mix. RIM also said that the BlackBerry smartphones continue to sell well into the prepaid and entry-level market, and the Bold 9900 continues to gain traction while certain models of the BlackBerry 7 were not selling as well as the company had anticipated.

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs