(This is an excerpt from an article I published on Seeking Alpha. Click here to read the entire piece.)
On Friday, briefing.com reported that rumors hit the trading floors that Cisco (CSCO) might make a buyout offer for Research In Motion (RIMM). The rumor was good for a brief 2-hour or so pop before the regularly scheduled selling in RIMM resumed.
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…the ugly close for RIMM continued a selling spree that seems to have accelerated once again. Clearly, I was very premature in noting the slowing of RIMM’s descent and looking ahead to a time the market may start to price in the company’s return to the market to repurchase its shares (see “RIMM’s Downward Momentum Finally Slows as Earnings Come Into View“).
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In the meantime, RIMM now has no more price support between here and the March, 2009 lows. Very few companies have fallen that far and slamming into such a milestone would be pretty big news. Since I do not believe in triple bottoms, such an event would also force me to contemplate something I did not even think was on the radar just a few weeks ago: a break of the March, 2009 lows and testing support dating all the way back to the 2006 lows.
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*Chart created using TeleChart
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Be careful out there!
(This is an excerpt from an article I published on Seeking Alpha. Click here to read the entire piece.)
Full disclosure: long RIMM shares and puts, long CSCO
will rimm be bought out?
I don’t know. Seems unlikely, but at this point, I sure hope so. If RIMM had a better competitive position, it would be a no-brainer acquisition given the massive amounts of cash the company has.
Let’s hope so at this point!