Analysts Play RIM Investors for Suckers
The stock has increased an absurd 40% over the last month, tacking on close to 4% this week alone.
Via my Briefing.com feed, I show RIMM upgraded from neutral to buy at Goldman Sachs. (How was it even "neutral" in the first place?). CIBC World Markets upped the stock to "Sector Outperform."
At least some other houses have expressed "caution," Morgan Stanley and Wedge Partners most recently.With regards to the analysts who are upgrading RIMM: If I didn't know better ... If I didn't have faith in my fellow man as being honest and forthright, I would cry "pump and dump." I just don't understand how anybody could look at RIM's situation and recommend buying the stock. Granted, it's a rarity for a Wall Street analyst to be ahead of the curve. Generally, they just follow the leader with upgrades and downgrades after the move gets made. So, on a higher level, I guess these bull calls on RIMM can be somewhat of a good thing. Drilling down, however, to this isolated situation: Analysts are setting longs up for some serious pain. When this thing starts to slide again, too many RIMM permabulls will double down, not learning the lesson history taught them. Consider what RIM has to do. It's right there with the mobile challenges Microsoft (MSFT - Get Report) faces. I have to give the great John Paczkowski of All Things D credit for scoping out the IDC data before I did and writing a strong article around it. He points out that Apple (AAPL - Get Report) crushed RIM years ago in the consumer market. And, according to IDC's research, "Apple iOS devices are being brought into the enterprise in droves, both by corporate and employee purchase." In terms of volume, IDC expects iOS to be the number operating system deployed by enterprise by the end of the year. I recall with laughter the debates I had with RIMM bulls last year. They sheepishly ceded failure in the consumer market, but refused to give even a little vis-a-vis the enterprise. Their main point: IT departments would never allow Bring-Your-Own-Device to take hold because of security concerns.
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