Hindsight is 20 20 and as luck has it our foresight on research in motion was right on the money two years ago
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Hindsight Is 20/20, And As Luck Has It Our Foresight On Research in Motion Was Right On The Money Two Years Ago............................In the early spring of 2010, while trading at over $60 per share and still a darlingof the street and corporate users, I warned that RIMM not only would not be ableto compete with Android and iOS, but will be a phenomenal short. Well, two yearslater, while trading in the low teens the RIMM research is still pushing out profits.Research in Motion reported a minutes ago and...RESEARCH IN MOTION 4Q REV. $4.19B, EST. $4.51BRESEARCH IN MOTION 4Q ADJ. EPS 80C, EST. 81CRESEARCH IN MOTIO SAYS BALSILLIE RESIGNS FROM BOARDRESEARCH IN MOTION SAYS JIM ROWAN TO LEAVERIMM WONT GIVE QUANTIVE VIEWS DUE TO LONG TERM FOCUSRESEARCH IN MOTION REVIEWING STRATEGIC OPPORTUNITIES
BoomBustBlog banking and tech research has been quite prescient for 2010/2011.Subscribers who took advantage of this deserve kudos. To wit, and as excerptedfromAnother RIMM Job? Its Amazing How Many Institutions Dont Read The BoomBust! Lets try this again: As Forecast Last Year and Clearly Demonstrated This Year, Research in Motions Proble Research in Motion has been one of the most successful tech shorts of this blogs history (thus far). We first recommended a short last year and reiterated it in the fist quarter of this year. Reference: •BoomBustBlog Research Performs a RIM Job! •BoomBustBlogs Fundamental/Forensic Analysis of Research in Motion Has Returned 2 This is a snapshot of RIMM as of the writing of this article...
As you can see, the results have been spectacular, particular if well timed puts have been put to use. In January I posted: I personally see a clear leader in mobilecomputing becoming visible in 2012. Usingoptions, a minimum of 2012 expiration OTMand ATM contracts can be purchase at themost optimistic break points demarcated bythe model above after being populated withassumptions you feel most valid.I will have a proprietary BoomBustBlog option modelavailable for download to paying subscribers by the end ofnext week, at which time we will revisit the analysis above. A 50% drop in price later... On that note, Bloomberg reports: RIM to Cut 2,000 Jobs as BlackBerry Loses Share to IPhone
I personally see a clear leader in mobile computing becomingvisible in 2012. Using options, a minimum of 2012 expirationOTM and ATM contracts can be purchase at the most optimisticbreak points demarcated by the model above after beingpopulated with assumptions you feel most valid. I will have aproprietary BoomBustBlog option model available for downloadto paying subscribers by the end of next week, at which time wewill revisit the analysis above.A 50% drop in price later... On that note, Bloomberg reports:RIM to Cut 2,000 Jobs as BlackBerry Loses Share to IPhone Googles Android has, by far, inflicted much more damage to RIM than Apple ever has. This was easily seen over 13 months ago, at least by BoomBust Bloggers, referencing BoomBustBlog Research Performs a RIM Job!...Page 5 of our Research in Motion forensic analysis (released in the summer of 2010 - RIMM Forensic Analysis and Valuation – Professional & Institutional orRIMM Forensic Analysis and Valuation – Retail) clearly stated that while weexpected RIMM’s handset shipments to rise as a result of a rapidly expandingsmartphone market, it will lose considerable market share....
As it turns out, it appears that we were erred slightly to the optimistic side with an 18%market share estimate for 2010. By the end of the 3rd quarter, RIM has fallen to 15.3%according to information calculated from IDC, and its decent has accelerated far fasterthan even we (the bears) have anticipated – a full 350 basis points for the quarter. Thisis 6x the decent of last quarter and 7 x the decent of the quarter before that. It is quitesafe to assume that they will be materially below this point at year end (the data that wecrunch is lagged by a quarter). This market share loss is most assuredly caused by theoutsized growth of Android, which I will demonstrate in a minute. Below are chartsgenerated from an updated version of the subscriber documentSmartphone Market Model – Blog Download Version:
As you can see above, for the full year of 2010 RIM has trailed smartphone marketpenetration growth and that trail has increased each and every quarter with the rate ofdecent rapidly increasing.RIM’s share price has benefited from anincreasing equity market as well as theannouncement of new products. The Torch,although possessive of redeeming newqualities, is essentially still a generationbehind Apple and 1.5 generations behindAndroid. SeeRIM Smart Phone Market Share, RIP?… Research in Motion is following the EXACT path we at BoomBustBlog had laid out for it since the 3rd quarter of 2010.Those that chose to follow this short recommendation had plenty of tools to assist in thedecision making:
RIMM Forensic Analysis and Valuation – Professional & Institutional: a 45 pageanalysis of RIMM, it’s strengths, weaknesses and prospects and probably the mosttthorough valuation that I know of concerning this company.RIMM Forensic Analysis and Valuation – Retail: a 10 page abridged versionfor my retail clients, containing all that you need to know including the marketscenario valuation analysis (seeMany More Black Eyes for the Blackberry? A Complete Forensic Analysis of Researc for more information). Smartphone Market Model – Blog Download Version: the interactive smart phone market analysis and penetration model, includes data for HTC, Apple, N Nokia and Research in Motion RIMM Multivariate Valuation Mode : the big Kahuna, for professional and institutional subscribers only. Please review the following overview of the model.RIM Model Assumptions
RIM Model Factors Driving GrowthAfter populating the assumptions tab,jump to the “Factors Driving Growth”tab and choose the player whosemarket share and penetration datayou want to populate the valuationmodel for the sake of comparison.The choices are “Nokia”, “RIMM”,“Apple”, “HTC” and “Others”. This tabis annual data only. RIM Model Quarterly Factors (driving growth)On the next tab, you can do thesame as the previous (this tab isquarterly growth). Each of thegrowth tabs has charts that are printand presentation quality. Just besure to tell everyone where you gotthesis, data and analysis from.....