Categories
Consumer Goods

$LULU . Once a darling.

$LULU was once a darling for the IBD.

It rides on a good wave, targeting the well-heeled and the growing yoga sports culture a couple of years back.

As a retailer, LULU’s growing income hinges on its ability to increase its store first across the nation, second the region and third internationally.

It was the International market that I have been waiting. Most companies expands real quick in the North America easily as they enjoy similarities.

However, the challenge will set in as they try to embrace International business in Europe, Middle East and Asia. All of a sudden, they find themselves lacking the strengths to expand. Or the markets outside of their core region does not embrace their products as easily.

In my opinion, LULU is in such a situation. Its growth will be slowing soon. Margins will soon be eroded. And it will heads towards the $20+.

At this moment, LULU is trading below the kumo since the breakdown of the market a month back. As it rallies back together with the general market, I see opportunities for shorts.

Categories
Tech

Is $RIMM new OS really that great?

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  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. What is causing the drop?
Now, back to Mr. Leon Cooperman. A Bloomberg article carries the headline RIM’S NEW OPERATING SYSTEM WILLL ‘SURPRISE’, COOPERMAN SAYS.

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. 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.

Categories
Tech

PALM Pre to Launch in Europe with O2 and Moviestar

Just got this in my email (Palm’s newsletter)

Palm webOS Phone to Arrive in UK, Ireland, Germany and Spain on Local Telefónica Networks.

WINDSOR, England, Jul 07, 2009 (BUSINESS WIRE) — Palm, Inc. (Nasdaq:PALM) today announced that the Palm(R) Pre(TM) phone is scheduled to be available initially in the UK, Ireland and Germany exclusively on the O2 network, and in Spain exclusively on the Movistar network, in time for the holidays. Palm Pre, the first phone based on the new Palm webOS(TM) mobile platform, brings your information from the many places it resides – on your phone, at work or on the web – into one simple, integrated view.(1)

“Europe continues to be an important region for Palm, and we’re proud to work with O2 and Movistar to spread the excitement Palm Pre has already ignited in North America,” said Jon Rubinstein, Palm chairman and chief executive officer. “Since we showed Palm Pre at Mobile World Congress in February, there’s been a great deal of anticipation for an announcement about European availability, and that day is here.”

…….

.

Let’s see if we will see a new high again.