John Paczkowski

Recent Posts by John Paczkowski

RIM: Call in the Bear Cavalry

Evidently Wall Street’s dim view of Research In Motion isn’t nearly dim enough.

Sterne Agee analyst Shaw Wu on Monday took a hatchet to his rating on the company, downgrading its stock to “neutral” from “buy,” and trimming his estimates for 2012 and 2013 earnings. And, notably, he conceded he should have done so earlier.

“Looking in retrospect, we should have downgraded in mid-October when the stock was $24 and our supply chain checks indicated that while its new flagship BlackBerry Bold 9900 was doing decently, the rest of its product line was lagging,” Wu explained. “We had trimmed estimates below consensus due to this. Since then, estimates have come down a bit but we believe will likely need to be reduced further.”

The main reason Wu isn’t advising his clients to sell their RIM holdings? “There is some intrinsic value in RIM as an acquisition target with its 70 million subscribers, push network, BlackBerry OS, and patent portfolio.”

Wu is latest in a conga line of analysts cutting their targets and/or ratings on the BlackBerry maker’s stock. RBC Capital Markets, Barclays Capital, Sanford C. Bernstein, Deutsche Bank, Citigroup, J.P. Morgan Chase — all have slapped downgrades on the beleaguered RIM in the past six months. And RIM’s stock has reaped the whirlwind for it. Shares in the company have plummeted more than 70 percent this year, slipping below book value earlier this month and consistently charting new 52-week lows.

In the run-up to RIM’s quarterly results in mid-December, the situation looks increasingly grim. Here’s hoping for some good news about the company’s new BBX platform come Dec. 15, when RIM reports third-quarter earnings.


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