# Short RIM



## slacker (Mar 8, 2010)

Hi all,

What are your thoughts on shorting RIM? Is RIM currently under value? or over value?

Thanks
Slacker


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## KaeJS (Sep 28, 2010)

There's one main reason I would recommend NOT shorting RIM:

Someone will buy them, and then you will be flocked like a pack of seagulls darting over a single MCD french fry as you watch the share price skyrocket.


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## slacker (Mar 8, 2010)

Why would people buy them?


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## larry81 (Nov 22, 2010)

KaeJS said:


> There's one main reason I would recommend NOT shorting RIM:
> 
> Someone will buy them, and then you will be flocked like a pack of seagulls darting over a single MCD french fry as you watch the share price skyrocket.


I have the same opinion


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## KaeJS (Sep 28, 2010)

Sorry, maybe I was unclear.

I didn't mean people as in "retail investors". By "someone will buy them", I meant that an established company will buy them out for their technology/patents/branding/reduce competition (or what's left of it).


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## slacker (Mar 8, 2010)

So you think that either the current stock price is under value, or some company will overpay to buy RIM?

Keep in mind that HP eventually bought Palm for $5 a share ....


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## KaeJS (Sep 28, 2010)

Understood,

But there is quite a bit of risk involved.

What happens if you short RIM, and then it doesn't really drop all that much, or in fact, it goes up a little bit to $27 lets say.

Then news is published that x company will be buying RIM, then you're in trouble because the price of RIM is going to go up for sure.

You can short RIM and make money, but there is added risk because there are a lot of quacks out there that think RIM will come back to life. Then, you also have the possibility of acquisition by another company.

I would short something different, such as BAC.

BAC is easier to predict, and people hate that stock. Time and time again that company has done nothing but blow things to pieces. Plus, it has a cheaper share price and a higher beta than rim does, which means you can make a lot more money.


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## Argonaut (Dec 7, 2010)

RIMM is a super easy stock not to touch. Going long or short is just too much of a gamble. The only way I would play it is buying puts just before they release earnings. I had tried to play it with puts during "regular" market time right before the crash, and it was just too wild. Gargantuan swings up and down, hard to know when to exit. I ended up making a beautiful $3.01 after commissions.


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## KaeJS (Sep 28, 2010)

slacker said:


> So you think that either the current stock price is under value, or some company will overpay to buy RIM?


As for this statement here, I think RIM is overpriced, but I am just a retail investor.

To a company, they may view RIM as undervalued depending on their plans.

I have not done any sort of research on RIM, so I have no idea what the company is worth. I don't even know if it's profitable anymore. All I know is:

a) Jim Balsillie is no longer a billionaire
b) The share price fell 50% in a couple months
c) AAPL is the big dog
d) RIM has no new material
e) It's has become a _laughingstock_ (get it?! )

And that's enough good reasons for me to not want to touch it.


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## clovis8 (Dec 7, 2010)

Another tech company will buy Rim for it's patents alone. Tech mergers are no longer about acquiring market share or talent. They are about amassing patent arsenals to ensure M.A.D.


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## KaeJS (Sep 28, 2010)

Sorry, what does MAD stand for?


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## clovis8 (Dec 7, 2010)

KaeJS said:


> Sorry, what does MAD stand for?


Mutual assured destruction. Companies gather patents to deter other companies from suing them.


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## KaeJS (Sep 28, 2010)

Thanks for clarifying that.

I have never heard of that term before.


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## Abha (Jun 26, 2011)

Forget about shorting RIM, the real money is in shorting Yellow Media, which is nothing short of the worst run company in Canada.


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## ddkay (Nov 20, 2010)

Kodak is worth five times todays trading price with $3 billion in patents but no one is buying them because they're so close to bankruptcy. IMO the same thing could happen to RIM. Microsoft already partnered with Nokia, it doesn't make a lot of sense for them to buy RIM today at $14 billion.

The Google purchase of MMI has been speculated for awhile, in fact as recently as August 2 this guy got it to a tee http://www.unwiredview.com/2011/08/...d-patent-problems-google-should-buy-motorola/


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## clovis8 (Dec 7, 2010)

KaeJS said:


> Sorry, what does MAD stand for?





KaeJS said:


> Thanks for clarifying that.
> 
> I have never heard of that term before.


It comes out of the cold war and nuclear war strategy.


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## kcowan (Jul 1, 2010)

Rim has missed so many marketing opportunities that I think they are beyond help now. But because the market is irrational, I would stay away from shorts. It is altogether too possible to be right and broke!

My hedge fund contest results


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## m3s (Apr 3, 2010)

kcowan said:


> Rim has missed so many marketing opportunities that I think they are beyond help now. But because the market is irrational, I would stay away from shorts. It is altogether too possible to be right and broke!
> 
> My hedge fund contest results


Shorting RIM at $58 when half the brand lovers still thought they were on top was a good time not after their troubles are all over the news and their outlook is priced in

It's kind of like Buy-low-sell-high in reverse.. RIM is a gamble now I'd move on to the next one.


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## rookie (Mar 19, 2010)

future is uncertain. at these levels, not looking at future, RIM is an attractive buy. so vegas would be a better option


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## ddkay (Nov 20, 2010)

Canada Post released commemorative stamps for RIM today, another one for the history books I guess


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## slacker (Mar 8, 2010)

There's a lot of pessimism on RIM, so I wonder if the current price has been factored in, or if there's some irrational optimism keeping the stock price up.


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## peterk (May 16, 2010)

I don't know much about shorting, but doesn't one usually short a stock that has shot up unnaturally fast, and buy a stock that has dropped unnaturally fast?..


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## kcowan (Jul 1, 2010)

We don't know if the latest bounce is a sign of the bottom or a bunch of people covering their shorts. If the latter, it could just be a blip on the way down!


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## ddkay (Nov 20, 2010)

RIM is in talks with record labels today to launch a music service for its devices


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## Mockingbird (Apr 29, 2009)

peterk said:


> I don't know much about shorting, but doesn't one usually short a stock that has shot up unnaturally fast, and buy a stock that has dropped unnaturally fast?..


Shorting is an art form - IMHO.

Here's a quote from John Maynard Keynes.
"Markets can remain irrational longer than you can remain solvent"

So, be careful with catching falling knives and fading parabolic moves.

MB


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