RIM’s stock has dropped 18% in past two days, what’s wrong?

13 Comments

RIM stock crash

At BlackBerry Cool, we try to avoid posts of an alarmist nature, as they’re usually a pretty cheap way to attract attention (playing Chicken Little was never our style). That being said, it’s always worthwhile to pay attention to RIM’s financial outlook, especially in the face of the current economic crisis.

Since trading resumed after Thanksgiving weekend, RIM’s share price has dropped from a high of $44.22 on December 1st to it’s current trading value of $36.38, a difference of $7.84, or roughly 18%. This drop is mostly a reflection of analysts such as J.P. Morgan trimming their RIM ’09 and ’10 earnings estimates. Just yesterday, RIM themselves lowered their Q3 revenue expectations due to product launch delays and the economy in general. While most of us already know how David Pogue feels about the BlackBerry Storm (you should all read Al Sacco’s excellent retort to Pogue’s article, by the way), even the Wall Street Journal is now asking whether RIM’s issue is launch delays or the devices themselves.

So I feel as though diligent members of the BlackBerry Nation have to ask, is this a minor hiccup for RIM or the beginnings of a looming downward trend? To put a finer point on it, is the sky falling or is it just starting to rain? Post a comment and let us know.

  • David

    this is just a hiccup…if it is starting to rain, it is just a shower.

  • David

    this is just a hiccup…if it is starting to rain, it is just a shower.

  • Bryan

    It didn’t help that Palm reported terrible numbers. For some reason, in addition to the negativity in the market right now whenever Palm takes a crap for some reason RIMM gets flushed down with it.

    I haven’t looked to see if PALM’s earnings actually correlate to RIMM’s in any way. All PALM sells is the Centro and the Treo but I don’t know how many Treos are still even being sold. And Centro is a budget device.

    Since PALM was the device of choice in the business industry for a while I assume people still think the whims of one determine the results of another.

    Things like the delay on the Bold and Storm didn’t help either.

  • Bryan

    It didn’t help that Palm reported terrible numbers. For some reason, in addition to the negativity in the market right now whenever Palm takes a crap for some reason RIMM gets flushed down with it.

    I haven’t looked to see if PALM’s earnings actually correlate to RIMM’s in any way. All PALM sells is the Centro and the Treo but I don’t know how many Treos are still even being sold. And Centro is a budget device.

    Since PALM was the device of choice in the business industry for a while I assume people still think the whims of one determine the results of another.

    Things like the delay on the Bold and Storm didn’t help either.

  • Stephen

    As a slightly disgruntled Bold owner experiencing 3 months of poor OS performance and still no sign of being able to stream media despite full 3G signal, I wonder whether this could have had an impact? After all, I’ve seen several extremely poor reviews of the Storm (having said this I have also heard of perfectly happy customers also) including NY Times, and The Times Online – “Blackberry Storm: prepare to be let down” being their title to the review. Does this have an impact on stocks? I don’t know.

  • Stephen

    As a slightly disgruntled Bold owner experiencing 3 months of poor OS performance and still no sign of being able to stream media despite full 3G signal, I wonder whether this could have had an impact? After all, I’ve seen several extremely poor reviews of the Storm (having said this I have also heard of perfectly happy customers also) including NY Times, and The Times Online – “Blackberry Storm: prepare to be let down” being their title to the review. Does this have an impact on stocks? I don’t know.

  • addictedtoBB

    I’m not sure if you’ve noticed…but stocks are dropping all over the world. I’m a little stunned that this surprises you.

  • addictedtoBB

    I’m not sure if you’ve noticed…but stocks are dropping all over the world. I’m a little stunned that this surprises you.

  • Zavantas

    The Bold not beeing able to stream is not the fault of the device, but the operator… I’m not able to stream youtube on my bold with my carrier. But a collegue with different carrier can even stream on his curve…

    The stock value is dropping, but RIM can show us very good sales figures! They are growing, but the whole stock system is going wrong. Only looking today, but not to the future…

  • Zavantas

    The Bold not beeing able to stream is not the fault of the device, but the operator… I’m not able to stream youtube on my bold with my carrier. But a collegue with different carrier can even stream on his curve…

    The stock value is dropping, but RIM can show us very good sales figures! They are growing, but the whole stock system is going wrong. Only looking today, but not to the future…

  • br14

    Seems RIM missed it’s earnings targets according to the profit warning issued the other day. Their sales last quarter were only up 65% on the previous years and new subscriptions marginally missed their estimates.

    I wouldn’t fear too much, it’s true there have been device issues but there always are when such siginificant change is introduced.

    Based on the developer seminar yesterday at which some pretty cool technologies were demonstrated for the BB I’d say things are looking good.

  • br14

    Seems RIM missed it’s earnings targets according to the profit warning issued the other day. Their sales last quarter were only up 65% on the previous years and new subscriptions marginally missed their estimates.

    I wouldn’t fear too much, it’s true there have been device issues but there always are when such siginificant change is introduced.

    Based on the developer seminar yesterday at which some pretty cool technologies were demonstrated for the BB I’d say things are looking good.

  • br14

    Seems RIM missed it’s earnings targets according to the profit warning issued the other day. Their sales last quarter were only up 65% on the previous years and new subscriptions marginally missed their estimates.

    I wouldn’t fear too much, it’s true there have been device issues but there always are when such siginificant change is introduced.

    Based on the developer seminar yesterday at which some pretty cool technologies were demonstrated for the BB I’d say things are looking good.