“Don’t say you weren’t warned. When Research In Motion failed to impress a jaded Street gang last night, the BlackBerry maker’s stock was taken behind the woodshed for a good old-fashioned beating,” Anders Bylund reports for The Motley Fool.
“The company appears to be gearing up for war. The next-generation Apple iPhone will hit store shelves in a couple of weeks, and Google has handset partners like Motorola and Samsung lined up for the launch of its Android platform a couple of months later,” Bylund reports. “Nokia is nibbling at the BlackBerry’s traditional home field with new models of a corporate-use slant, and Sony Ericsson might jump aboard that Android bandwagon, too. The competition looks ready to launch a massive onslaught…”
“So I don’t think that RIM’s increased [marketing] spending is the real reason for the price drop today, nor do I think the lowered earnings guidance is to blame. Instead, these items were taken as confirmation that the company is readying for a fight — and it’s a battle it might not win. Today’s drop was steep, but the stock still trades at 55 times trailing earnings at prices not seen since late April,” Bylund writes. “It can still fall a lot further…”
Full article here.
“It’s kind of one more entrant into an already very busy space with lots of choice for consumers,” RIM Co-CEO Jim Balsillie said of Apple’s iPhone on February 12, 2007. “But in terms of a sort of a sea-change for BlackBerry, I would think that’s overstating it.”
RIMM is currently trading down $18.83 (-13.23%) at $123.51 per share.