Research In Motion Limited (USA) (NASDAQ:RIMM) (TSE:RIM) shares have risen by more than 8% in trading so far today. The firm’s shares, which opened at $10.79 this morning, stand at 11.43 at time of writing. The surge follows a more than 25% loss reflected in the firm’s most recent earnings announcement.
On December 20, Research In Motion Limited (NASDAQ:RIMM) (TSE:RIM) announced its earnings for the company’s third fiscal quarter. When the firm’s executives revealed that they expected low end revenue to severely decline next year, the firm’s`share fell by more than 25% in 24 hours. Today’s lift can be seen as a reaction to that huge decline.
Earlier this month, value investor Mohnish Pabrai took part in a Q&A session with William & Mary College students. Q3 2021 hedge fund letters, conferences and more Throughout the discussion, the hedge fund manager covered a range of topics, talking about his thoughts on valuation models, the key lessons every investor should know, and how Read More
Whether or not RIM is A, really depends on their thoughts on whether the firm’s upcoming BB10 operating system and smart phones are likely to succeed. The firm is set to launch its first handsets utilizing the new operating system on 30 January.
The question for investors is not just if they would like to bet on a Research In Motion Limited (NASDAQ:RIMM) (TSE:RIM) resurgence, but when they should get involved. The firm’s 2012 performance has clearly demonstrated that the shares suffer from erratic volatility. Despite an October low of $6.22, the firm’s shares stand at just 17% below their 2012 open.
The buoyancy in the firm’s shares since October has been almost entirely supplied by hopes for the firm’s new line of smart phones. If they do not impress at launch, or their sales are sluggish soon after, the company will probably see its gains quickly erased and investor confidence disappear. It is difficult to tell if Research In Motion Limited is worth its current market price if it were to be broken up.
As we head toward the launch of the firm’s Messianic handset, investors are trying to figure out what price is reasonable to bet on the company succeeding, and what portion of their investment might be recoverable should the company fail in its ambitions.
Today it is clear that investors are placing a line at around $11.50. Shares have only gone above that figure once so far today, and they sprung back quickly thereafter.When markets resume full trading later in the week, higher volumes of the shares are likely to come into play.
The month January, sodden in BB10 rumors as it is likely to be, will take the form of a numerical argument between investors who think the company can succeed and those who believe it is unlikely to do so. This argument will reach its height in the days between the official launch and the first appearance of the devices on store shelves.
Research In Motion Limited (NASDAQ:RIMM) (TSE:RIM) still has a large fan base who, if interested in the product at release, may form a vanguard of sales strong enough to give the product a foothold in the market. There is room for a third mobile device maker in the market. Whether that device maker is Research In Motion will be decided almost entirely on January 30.
January is likely to be a month full of Research In Motion Limited (NASDAQ:RIMM) (TSE:RIM) coverage. Stay tuned to see if the Canadian firm has what it takes to form a real part of the modern mobile device market.