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BlackBerry Limited Message Board

  • adeiflig adeiflig Apr 3, 2012 6:22 PM Flag

    AT A LOSS OF WORDS....

    I am simply stunned to learn of the steep drop today from $ 14.90 to $ 13.00 based on some loud mouth interview on CNBC. What truly amazes me is that this drop occurred at a time when the company RIMM has put out it most bold and bullish news investors could ever have wanted to hear which is "that they are opening up their secure network to iphones and google platform around the world".

    RIMM has 77 million members, Apple has 100 million members and Google phones have about 200 million members.

    In one strong scoop, RIMM has grown its consumer base from 77 million members to 377 million members, each paying $ 4 per month to RIMM. RIMM has gone from being an enemy of Google, Samsung and Apple to being a friend in providing security backup for their phones.

    Google, Samsung and Apple will no longer have to worry about security and will not be interested in developping any as they have RIMM, now their friend.

    In terms of revenue, RIMM will generate $ 4 per user, with a possible 377 million members or $ 1.3 billion in revenue per month. This will equate to $15.6 billion per year. One would argue that sales would drop from their current $ 18 billion to $ 15 billion doing this.

    In reply I would say that the security side of the business has an 80% gross margin compared to a 35% gross margin on the sale of phones. So 80% of $ 15 billion in sales will give a gross profit of $ 12.5 billion. Remove some costs of operations and you find yourself with $ 10 billion in profit per year or $ 20 per share.

    Security firms have stable income so one will give RIMM a multiple of 30x so we are looking at a stock price of $ 600 per share compared to the measily $13 per share now.

    Also, RIMM will most likely unload their phone business which would generate billions in cash and, license out its BB10 to a company like Samsung whom would pay another $ 10 per phone that is sold.

    Overall I am truly at a loss of words to describe what I feel at this moment except to say that the market is full of dum investors whom can`t tell when an golden opportunity has been given to them.

    Watch as revenues and profit margins soar. I would not be surprised to see firms like Apple, Goog, Samsung, MSFT buy a stake in RIMM as they know that it will be critical to any company.

    JMHO

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