Research In Motion Limited (USA) (NASDAQ:RIMM) Thumbs Down From WFC


Research In Motion Limited (USA) (NASDAQ:RIMM) (TSE:RIM) shares began to recover in early afternoon trades after dropping around 50 cents per share since the market opened on Thursday in New York. Shares of RIM have dropped approximately 25 percent on the NASDAQ since last week’s earnings report. The company’s increases at the Toronto Stock Exchange today have been the first solid gain since Monday’s report.

Research In Motion Limited (USA) (NASDAQ:RIMM) Thumbs Down From WFC

Although the company’s earnings report was better than expected, shareholders and investors were spooked by a note that came with that report. As ValueWalk reported earlier this month, it seemed to indicate that the new BlackBerry 10 handset will have a negative effect on the company’s service revenue, which has been one of the company’s keys to success as it has struggled to stay afloat.

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The company’s stock had increased prior to that report on the news of January’s unveiling of Research In Motion Limited (NASDAQ:RIMM) (TSE:RIM)’s new BlackBerry 10 handset. Thus far the outlook for the new handset is good, although the company is completely reliant on its success. If the BlackBerry 10 fails, Research In Motion could be finished.

Meanwhile analysts at Wells Fargo Securities (WFC) expect that Research In Motion Limited (NASDAQ:RIMM) (TSE:RIM) will experience lower profit margins next spring due to handset discounting. The company’s new BlackBerry 10 handsets will be unveiled at the end of January, so by the time spring arrives, retailers could be offering those handsets at a discount.

As we reported, Nokia Corporation (NYSE:NOK) is seeing its Lumia handsets discounted post-Christmas only a month or so after they were first offered for sale.