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Research in Motion is facing a tougher |
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Released on Friday, October 15, 2011, 8:00 AM ET
Pittsburgh, PA (SpeculatingStocks) -RIM, otherwise known as Research In Motion, is the software brain behind the 2000’s decade of Blackberry frenzy. But it seems that this company might be a short-lived wild child.
Recent problems with the RIM connection and service to clients have been cause for question among many investors about the RIM stock, or rather stocks. Research In Motion trades through the Toronto Stock Exchange—being a Canadian based company—and the United States stock exchanges at the NASDAQ. Careful which one you are looking at, NASDAQ:RIMM, is the American trading arm of the firm and is currently priced at $23.97 per share (4:00 PM EDT, October 14th, 2011), whereas the TSE:RIM is the Canadian arm trading at $24.26 per share (4:00 PM EDT, October 14th, 2011).
However, a quick look at the stock’s historical movement would indicate that whatever stock you are referencing, this is a sinking ship, and it has been taking on water for a while.
Research In Motion made its market limit in mid-2008, and then with the crash of the real-estate and global financial markets has taken a dive and never fully recovered. For a period last year, starting in October the company held a several month up-trend, but recently has reversed that momentum.
Part of this problem could be the fact that Apple, Microsoft, Samsung, Nokia, and T-Mobile have been encroaching upon Blackberry’s market shares, and fast. Recent cell-phone and tablet junkies predictions are that RIM will not be able to compete with Samsung’s Galaxy Tab and Apple’s iPad, not to mention Google backed Android Smart Phones and the obvious challenger Apple’s iPhone.
In fact, the markets surprising reaction to the iPhone 4S has led to speculation that RIM has met its match and cannot possibly keep up with Apple’s innovation and market edge. Indeed the company is falling on hard times, and it will be interesting to see how this one pans out.
RIM has been losing operating margin over the past few quarters, and as far as company classification is concerned RIM might be a cash cow moving to a cash liability in the future, but has proven to be highly profitable in the past, holding a retained earnings of over $7 trillion. What does seem to be a problem is that RIM’s cash flows are facing serious problems, as they have reported negative cash flows for the past few periods and totals through-out the years—although this can be offset by serving assets to funnel cash, it does not typically spell growth for the firm.
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