This is an excerpt from an article I originally published on Seeking Alpha on December 16, 2011. Click here to read the entire piece.)
Research In Motion (RIMM) has dropped to prices last seen in 2004, yet management has not yet seen fit to buy a single share under its latest stock repurchase authorization. According to its third quarter fiscal year 2012 earnings report from December 15, RIMM let another quarter come and go without repurchasing shares. Total outstanding shares remained essentially the same as last quarter and “common shares repurchased” remains zero.
This lack of activity has occurred without commentary or explanation from the company. Surprisingly, analysts in the last earnings call did not seem to ask about it (click here for the transcript for the Q&A from the earnings call). {snip}
With shares trading in the teens, plenty of cash on the balance sheet, and an as yet unused share repurchase authorization, I have to conclude that there is a high likelihood that management still sees further downside ahead. {snip} Smelling blood, growth in shares short could actually accelerate in the coming weeks.
Source: NASDAQ RIMM Short Interest
The chart below also shows that RIMM has little historical price support until around $8.
Source: FreeStockCharts.com
{snip}
Be careful out there!
This is an excerpt from an article I originally published on Seeking Alpha on December 16, 2011. Click here to read the entire piece.)
Full disclosure: long RIMM shares and puts