Research In Motion Officially Acknowledges Its Retrenchment

(This is an excerpt from an article I originally published on Seeking Alpha on March 29, 2012. Click here to read the entire piece.)

{snip}

This is the change in “guidance practices” and outlook that beleaguered mobile company Research In Motion (RIMM) announced in its latest earnings report today. It has all the trappings of a company hunkering down in the midst of assaults on all sides of its business. {snip}

I am fascinated by RIMM’s large cash horde because once upon a time last June, RIMM announced its third share repurchase program in recent years. I expected that event to provide a major catalyst given how aggressively RIMM executed its previous programs. {snip}

This latest earnings report also reported no stock repurchase activity. With the company officially in retrenchment, I fully expect the remaining months of the buyback authorization to fade away with cash staying in the bank. Although the last two buybacks have now resulted in massive paper losses, I still find it a bit ironic that the company buys no shares exactly when it should be insisting louder than ever that its shares are insanely cheap.

Regardless, with a large turnover in management, a GAAP net loss for the quarter, the suspension of faulty guesses at guidance, all capped off by a steep after-hours plunge and recovery, it is possible the inexorable trip to single digits is indefinitely postponed. Perhaps. Time should tell.


The recession continues to deepen for RIMM
The recession continues to deepen for RIMM

Source: FreeStockCharts.com

Be careful out there!

(This is an excerpt from an article I originally published on Seeking Alpha on March 29, 2012. Click here to read the entire piece.)

Full disclosure: Long RIMM shares, calls, and puts; short calls

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