Don't Approach RIM With Caution - Don't Approach at All

NEW YORK (TheStreet) -- The nerve endings of traders have to run red and raw when a company with modest problems stops giving financial forecasts. But when the company announcing that it's clamming up is in an utterly fractured state, the lack of future communication is all defining.

And so it is with Research in Motion ( RIMM). Battered by Apple ( AAPL), Google ( GOOG) and missteps, RIM reported the latest in a line of dangerously bad earnings and announced that they would no longer issue financial forecasts.

Proceed with caution. In fact: don't even proceed. For a company this troubled, radio silence is a deal killer.

Curiously -- almost comically -- Marketwatch spun it as a positive, noting that RIM is developing a reputation for being "forthright even though they're not giving forecasts anymore." Uh, what? RIM's management is either new or, as of yesterday, fired. They haven't been there long enough to develop a reputation. And zipping their lips is hardly a good start.

The Wall Street Journal mentioned the lack of forecasts matter-of-factly, though at the end of their coverage as a near footnote. This doesn't give it adequate weight. Investing in RIMM is rife with risk. Doing so without the security and benchmark that quarterly forecast from management provides is foolhardy.

The Wall Street Journal mentioned the lack of forecasts matter-of-factly, though at the end of their coverage as a near footnote. This doesn't give it adequate weight. Investing in RIMM is rife with risk. Doing so without the security and benchmark that quarterly forecast from management provides is foolhardy.

Considering, wave that flag.
At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.

Marek Fuchs was a stockbroker for Shearson Lehman Brothers and a money manager before becoming a journalist who wrote The New York Times' "County Lines" column for six years. He also did back-up beat coverage of The New York Knicks for the paper's Sports section for two seasons and covered other professional and collegiate sports. He has contributed frequently to many of the Times' other sections, including National, Metro, Escapes, Style, Real Estate, Arts & Leisure, Travel, Money & Business, Circuits and the Op-Ed Page.

For his "Business Press Maven" column on how business and finance are covered by the media, Fuchs was named best business journalist critic in the nation by the Talking Biz website at The University of North Carolina School of Journalism and Mass Communication. Fuchs is a frequent speaker on the business media, in venues ranging from National Public Radio to the annual conference of the Society of American Business Editors and Writers.

Fuchs appreciates your feedback; click here to send him an email.

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