The Case for Research In Motion (RIMM)
It's not very often that we get a 15% pullback when a stock meets expectations, but that happened to RIMM. The market had gotten ahead of itself and was expecting a blowout quarter. Instead what they got was what was expected.
Some say that the co-CEO should focus more on running the business rather than chase the Phoenix Coyotes.
Others say that RIMM is losing a lot of market share to AAPL.
Heck some others are saying that RIMM is going to go bankrupt like Nortel.
While there may be some truth to the first statement, I believe that multiple smartphones can be successful in the marketplace.
While AAPL has a wide moat with computers, ipods, iphones and software, not everyone wants an iPhone to do their emailing. Have you ever tried emailing with an iPhone? There's no contest when comparing it with a Blackberry.
Secondly, I don't know where these 'facts' that RIMM will go bankrupt are coming from. They are enjoying healthy margins and have robust sales. Next time you're sitting in the subway take a look around you. The business penetration of Blackberries is huge. The iPhone is cool too but it serves a different purpose.
RIMM is now trading at 18x forward earnings. With additional selling pressure in the short term it is likely that there will be some extreme volatility.
I for one see this as a golden opportunity to purchase RIMM at these levels and have initiated a position today. While I see AAPL and RIMM as competitors I believe there is adequate room for both of these companies to grow.
And no I don't believe RIMM will go bankrupt. All the talk about is just plain absurd.
Disclosure: I'm LONG Apple (AAPL) and LONG Research In Motion (RIMM)
Some say that the co-CEO should focus more on running the business rather than chase the Phoenix Coyotes.
Others say that RIMM is losing a lot of market share to AAPL.
Heck some others are saying that RIMM is going to go bankrupt like Nortel.
While there may be some truth to the first statement, I believe that multiple smartphones can be successful in the marketplace.
While AAPL has a wide moat with computers, ipods, iphones and software, not everyone wants an iPhone to do their emailing. Have you ever tried emailing with an iPhone? There's no contest when comparing it with a Blackberry.
Secondly, I don't know where these 'facts' that RIMM will go bankrupt are coming from. They are enjoying healthy margins and have robust sales. Next time you're sitting in the subway take a look around you. The business penetration of Blackberries is huge. The iPhone is cool too but it serves a different purpose.
RIMM is now trading at 18x forward earnings. With additional selling pressure in the short term it is likely that there will be some extreme volatility.
I for one see this as a golden opportunity to purchase RIMM at these levels and have initiated a position today. While I see AAPL and RIMM as competitors I believe there is adequate room for both of these companies to grow.
And no I don't believe RIMM will go bankrupt. All the talk about is just plain absurd.
Disclosure: I'm LONG Apple (AAPL) and LONG Research In Motion (RIMM)
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