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Apple Inc. Message Board

  • sonw_k2a sonw_k2a Feb 3, 2013 10:00 AM Flag

    Let analyze the outcomes from two extreme from the worst to the best,cases of RIMM

    If you are long on this stock and plan to stay for a long term appreciation for this stock, then you shall go to read the article “BlackBerry 10: Forget about the phone - it's the OS that really counts” published today in Zdnet as well as the comments from the followers.

    As investor, we have to analyze the outcomes from two extreme cases, i.e., the worst and the best, then calculate the risk / reward ratio to decide whether the odd is against us or for us.
    Let us look the worst case first, in which that the new phone does not sell well and the company cannot stand along by itself and force the company to find a buyer with fire sale price.
    So what will be worst fire sell price?
    The current book value is about $18.5 which does not include the majority value of its patents (IP property). Some valued the IP from low $4/share while others said it worth $18/share. Because ause it is fire sale, so let us use the $4 number. Then the actual book value is about $18.5 + $4 = $22.5.
    Now let take another $4 out due to the lost in next two years, then the book value drops to $18.5.
    Now let us assume that because it is fire sale, so the buyer only offer 50 cent on a dollar based on the book value, and the sell is $9.25.
    With current share price of $13, we will lose 30% our money.

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