First off, this is not a post about the technical superiority of any OS.
Secondly, I am vested with a SHORT position on RIMM. So, read this with a huge pinch of salt.
For the past few days, the media has been reporting Mr. Leon Cooperman’s ownership of 1.42 million of $RIMM Â shares as of Sept 30. Clearly, this suggests that the shares were bought between July to September. As we can see from the chart below, the price range from $20 to around $32 during that period.
My guess is his entry will be around $25.
During that period, the common reasons to buy RIMM are:
- US$25B cash they have
- Little or no debt
- P/E of less than 10
- Corporate entreprise still uses RIMM
- Emerging markets are growing (despite the loss in North America)
And still RIMM falls hard. Not only does it go below $20, it breaks a critical support at around $18.50 . I recall when RIMM has the service outage, it was holding its price fairly well.Â What is causing the drop?
I have a lot of respect for Mr Cooperman for being a successful fund manager. However, I cannot agree with the statement. Just because the new operating system ‘surprises’ does not mean it can turn the company around.Â If that is the case, Palm will have an easy walk in the park with their webOS when it first launch (granted, Palm’s financial position is nothing to brag about).
In this new war for the ‘tablet/smartphone’ market share, it is not the device or the widget that is creating the turn. With iOS and Android cornering the major bulk of the market share, what else is left for RIMM? Microsoft will also be pursuing this market together with Nokia. As far as the ‘device’ market share is concerned, RIMM is up against Apple, Nokia, Samsung, HTC and many more.
In terms of vertical markets like Music, Videos, Publishing, Applications and Software, RIMM is losing developer base and competing with Google, Apple and Amazon in creating valuable relationships with various verticals customers. For example, Amazon most and Google most likely own the Publishing space. Where does all these leave RIMM? Will RIMM be able to replace Apple’s iTunes and their relationship with the music labels?
Internally, RIMM is losing a lot of executives including Top Execs heading the emerging markets. If this is not a sign of a sinking ship, what is? Imagine, the various Heads of your fastest growing markets are jumping ship?
RIMM has totally lost its momentum on Innovations, Growing the Community, and keeping their top executives. Meanwhile, competitors continue to gain market share at their expenses.
Anyone running a race will know how difficult it is to regain the top position once you lose the focus and momentum. This is where RIMM is at. And technically, the chart shows continue bearish movement to come.
At best, a technical rebound. However, with 5 gap down in 1 year, there is very little hope for RIMM.