The Rundown on Research In Motion (RIMM)

It's unlikely RIMM's BlackBerry 10 is going to be real competition for the iPhone and the stock's price is reflecting it.

   

Video Transcript

There’s still not quite a strong argument out there for full-on bearish trades, however, any time the market gets a little toppy like this, there’s going to be some selling, so some stocks are going to sell. They fall into a couple of categories. They could be things like Facebook (NASDAQ:FB), for example, which is down after its latest earnings report.

The options on Facebook are just crazily priced, so it’s not one we were even looking at for our SlingShot Trader members. And its report, in and of itself, wasn’t bad at all.

Here’s another good example. I don’t know how many of you have been watching Research In Motion (NASDAQ:RIMM) with the BlackBerry 10 release. To me, this smells like Palm all over all. It’s like the Palm Pre all over again. Maybe I’m naïve, but I cannot imagine how BlackBerry, no matter how nice their keyboard is, are going to make even a small dent in the market share out there that’s just dominated by Apple (NASDAQ:AAPL), Samsung and HTC, especially because they’re continuing to use a proprietary operating system and they’re not Apple.

So, the bottom line is before RIMM did the BlackBerry 10 announcement, traders everywhere were buying the stock like crazy, which does happen when you get a really positive market where everybody’s really excited and things are starting to look up for another extension. So, you get traders basically buying the rumor then, as soon as the news comes out, you get a lot of selling.

As a matter fact, I had expected that the selling for RIMM wouldn’t start until Wednesday. That was my original estimate, and I think we got a little early selling because of the whole Lenovo deal. For those of you who may not know, RIMM’s value really is not as a going concern but as an acquisition.  So, while I think it’s unlikely, if an Apple or Microsoft (NASDAQ:MSFT) or something like that bought RIMM – which, I imagine Research In Motion will eventually be bought out – that would drive the stock price up a little bit, and that may have been driving some of that.

Lenovo was rumored to be looking at it, but there’s no way the Canadians are going to let that happen, so we saw a pretty sharp move to the downside as, I think, everybody recognized that’s not a realistic potential.

So, Research In Motion is a good example of what we’re seeing around the market right now where traders are just taking profits off the table of stocks that have already run up quite a bit.

Investor Place advisors John Jagerson and S. Wade Hansen are co-founders of LearningMarkets.com, as well as the co-editors of SlingShot Trader, a trading service designed to help you make options profits by trading the news.  Get in on the next trade and get 1 free month today by clicking here.



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