Best :value play" on the planet. No debt, 2.2 Billion in cash (almost $4 per share cash) free cash flow, takeover candidate a possibility,patents and intellectual properties extremely valuable and worth alot more than $2 per share. Buy, hold be patient and you will be hansomely rewarded...
When you here value trap and wonder what people are taking about, think RIM. Now i`m not saying that they will go bust but the facts are this:
- the cash reserve will be depleted by year end
- patents are valuable, but dont justify a 3.3 billion dollar cap on their own.
- they have falling sales, revenues, profits, market share, quality... you name it.
- three years ago they had Apple to deal with, now samsung, google, microsoft have been added to that list.
fact is, while there seems to be value here based on cash, valuation is usually a longer term concept and incorporates the future health of the company, not just today`s snap shot of it.
And now folks the value trap lesson of the day = dont forget that cash burns easy.
They will easily bank another 100 million in cash this coming qrtr and add 2million+ subs. They held back late revenue last qrtr because they knew this qrtr would be rough. But keep lying about everything and anything
I keep hearing that the intellectual property is extremely valuable, but the companies that are actually innovating and selling smartphones don't seem to need RIMM's intellectual property. So ... who would it be valuable to?
With that kind of optimism in the face of a stock that has gone from $140 to $6.30 where it would need a 1200% premium to get back to 50% of its former value of $75 I would say that this is absolutely a short right here until these dreamers come to terms with what has happened. I shorted more today in anticipation of this. Easiest bet I ever made.