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RIM Stock Drops As Reports Of Layoff Notices Emerge

Rimm Stock

First Posted: 06/21/11 08:12 AM ET Updated: 08/21/11 06:12 AM ET

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THE CANADIAN PRESS -- TORONTO - Research In Motion shares closed down another six per cent Monday after the BlackBerry maker took a major drubbing on the Toronto stock market last week.

The Waterloo, Ont.,-based company closed down $1.83 at $25.41 on the Toronto Stock Exchange Monday.

RIM shares fell nearly 20 per cent on Friday as investors responded to a rash of analyst pessimism about the company's prospects.

On Thursday, Research In Motion (TSX:RIM) announced plans to cut jobs as it works to roll out new smartphones and updated tablets in a bid to stay competitive against mobile computing behemoth Apple (Nasdaq:AAPL) and the emerging threat of products that run on Google's Android platform.

A Waterloo, Ont., radio station said Monday that as many as 200 employees received layoff notices earlier in the day.

570 News said that many of the jobs were thought to be in manufacturing.

The company had already cut its profit forecasts for this year. The rollout of its PlayBook tablet came with little fanfare and lukewarm reviews in April, on the heels of the much-publicized launch of Apple's iPad 2 -- which flew off store shelves and has remained one of the hottest tech gadgets on the global market.

Until Friday's dismal performance, RIM shares hadn't been below $30 on a split-adjusted basis since August 2006.

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THE CANADIAN PRESS -- TORONTO - Research In Motion shares closed down another six per cent Monday after the BlackBerry maker took a major drubbing on the Toronto stock market last week. The Waterlo...
THE CANADIAN PRESS -- TORONTO - Research In Motion shares closed down another six per cent Monday after the BlackBerry maker took a major drubbing on the Toronto stock market last week. The Waterlo...
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Teddi Knight
0 Fans
12:53 PM on 06/21/2011
The problem for investors has to be the analysts who continually harped about the low PE, the terrific value, the cheap price, without actually doing their homework. RIM since setting a high in 2008 of $150.00 was way overpriced, was already declining in market share and was totally absorbed with other endeavors like an NHL franchise bid, rather than focusing on its core product and staying ahead of the competition.
RIM was never "investment grade" but is for traders and those who do options. I earned double digit annual returns by using options. My trades are here:
http://www.fullyinformed.com/stocks-canada/2011-RIM.htm
Meanwhile I wrote article after article warning that the stock was in decline and was not for buy and hold investors. Here is one such article
http://www.fullyinformed.com/articles/2011/research-in-motion-stock.htm

Investors need to learn to turn off the "talking heads" and look at the fundamentals. RIM was poised for collapse as soon as they ignored the iPhone entry in 2007. They didn't realize that they had been number 1 because there was no competition. Management ultimately is to blame.

Teddi Knight www.fullyinformed.com
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newblog41
32 Fans
03:22 PM on 06/21/2011
....if your saying that RIM is overvalued right now....you better re-read their financials...this stock is ripe for a takeover or a strategic partnership. They are going through what all large successful companies go through....a strategic inflection point....look it up! To name a few who have: coke, pepsi, intel, apple, microsoft, GE, pg, disney, etc, etc. etc!
I will make you a bet...if all the news is out and it does not pop below $22....it should be trading in the $40 range within the next 3-4 weeks. The conumdrum is....are the idiots (analyst's) waiting until august to beat them up again.....don't forget they sell something called a "crackberry" and make a ton of cash and have no debt....this looks like an opportunity to me.....IMHO
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Teddi Knight
0 Fans
09:39 PM on 06/21/2011
I don't think you read my post properly. At $150.00 RIM was way overpriced. When it comes to investing, "it pays to pay attention". RIM failed to pay attention and has suffered because of this. They laughed when Apple introduced the iPhone. It is sad to think that they failed to learn from watching other companies such as some of those you mentioned.
I doubt RIM is going to disappear. If you take the time to read my various articles you can see that RIM has very little debt, a boatload of cash, millions of subscribers and a terrific security system. But it is investors perception that matters and the declining market share and subscriber base in North America has investors looking down the road. Whether investors are correct in what they see for the future of RIM is immaterial. But it is that perception which is causing them to dump their shares and which has damaged RIM's valuation by billions of dollars and hurt millions of shareholders and pension funds.
It is not a question of making a bet. It is a question of understanding investing. RIM stock was never for buy and hold investors. It was and still remains a stock for day traders and those who do options such as myself.
I prefer my steady annual and consistent returns and I will leave wild rides like RIM for those of you who prefer that style of investing.

Teddi Knight www.fullyinformed.com
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HUFFPOST SUPER USER
valar84
133 Fans
08:34 AM on 06/21/2011
In a way, this illustrates all that is wrong with the business culture. Not only is laying off workers when you get a 700 million quarterly profit mind-boggling (returns expectations be damned, what those expectations mean is that the rich investors will not tolerate sharing the wealth with the workers who create it), but RiM is taking just plain bad business decisions, focusing on the short-term and not the long-term. Workers are the ones who really make innovation happen and who make products better. By laying people off, you lose their expertise and you sacrifice the long-term prospects for short-term gains.

I don't think any company has ever taken the lead in its industry by laying off people, they have done so by hiring people and investing in the future.
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HUFFPOST SUPER USER
Adrian31
60% of the time, it works everytime...
310 Fans
07:27 AM on 06/21/2011
Gotta keep the shareholders happy! See what happens when you ONLY earn $700 million in the quarter? You lose your jobs. Talk about corporate greed!
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Hugemidget
5 Fans
11:52 AM on 06/21/2011
Yep, and there's definitely something wrong when the cause of RIM's loss of innovation and competitive edge was mostly caused by bad decision making and poor leadership at the top, yet those at the top get to keep their jobs, their inflated salaries, benefits and golden parachutes, but the people who made RIM what it was, their core workers, get layoff notices. RIM must be proud.
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canfemlib
153 Fans
12:43 PM on 06/21/2011
Yes, I have to wonder what "enough" is. RIM has lots of cash on hand, substantial profits but not 'enough" to satisfy Wall Street.
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