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BlackBerry Limited Message Board

  • dontfighttape dontfighttape Oct 28, 2010 12:04 PM Flag

    Shorts will laugh at my predictions, but they will be proved wrong!

    Anyone remember Newbridge Networks? It got taken out by Alcatel (I think) 10-12 years ago.

    Newbridge frustrated the shorts to no end - many learnt a lesson they likely will never forget.

    The pain about to be inflicted to the Rim shorts will be of several orders of magnitude greater than that inflicted by Newbridge!

    Why? Consider this:

    1. Rim is undergoing an overnight perception change from a company losing market share and about to go bankrupt, to one that is already earning ~$6/share, growing 30+% in a market that is expanding 50%.

    2. As a result of this change in perception, Rim will rapidly be revalued from a trailing PE of <8 to a 2011 (or even 2012 or 2013) PE of >15 like it historically has been for several years.

    3. This change in perception will cause these same perception changers to re-evaluate (i.e. downsize) their perception on Rim's main competitor, Apple, from a company that was perceived to have the entire (or most of the) playing field to itself, to one that will now be relinquishing a huge chunk of that playing field back to Rim.

    4. This will create panic amongst the shorts and investors who have gotten used to making money off of the long AAPL/short RIMM pair trade, causing them to cover and/or unwind their trade, and in many instances, reverse it - i.e go long RIMM and/or short AAPL/long RIMM pair trade. This phenomenon will add fuel to the fire.

    5. Perception will turn to reality - AAPL will miss and/or downsize their earnings (due to North American market saturation and/or limited worldwide penetration), while Rim's growth will continue to accelerate due to worldwide dominance. This will add rocket fuel to the fire.

    #1 started 2:30 pm Oct 25th.
    I expect #2 to begin closer to, or soon after Dec 16th.
    I expect #3 to begin a couple months after the release of the Playbook.
    I expect #4 to occur soon after #3.
    I expect #5 to occur late 3Q to 4Q 2011.

    I expect Rim to end 2011 at >$150 per share.

    These are merely my humble opinions - please do your own due diligence whether you wish to go short, or long RIMM.

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