After weeks of waiting for my E*trade account to be activated, I finally got the go-signal to trade last friday. And nothing , absolutely nothing, can take me away from my laptop and do a trade.
My first trade was the blackberry-maker, Research in Motion (RIMM). Because it was my first time to use the E*Trade platform, it took me some time before I got the hang of buying stocks there. So it was around past 10PM Manila time when I finally bid for RIMM at $14.05.
I knew from the start that this is a speculative trade. They have a shrinking market share, lower than expected low earnings, significant inventory write-downs , and the list goes on. In the midst of the mass resignation of the top brass in that company, they got a new CEO, Thorsten Heins, who promises to make strategic decisions over the course of the year to respond to the company's continued decline in sales, and one of those options is selling the company or part of it to another company. RIMM attracted many suitors. And why not? The company has 75 million users and garners 17% of the market share. Its Blackberry is still considered a premium product among the corporate market. I mean, no less than the US President is using it. And this is an attractive stock at this point, having a P/E ratio of around 4 , when industry average is around 26. This stock is trading almost at the low end of their 52-week range. But what set this stock price to soar up last Friday was the rumor of a buyout.
As for me, I continue to be in the dark. The market appreciated that the new CEO is addressing the company's problems head-on but what is glaring to me is the lack of specific strategic plans in his announcement. He merely discussed their desire to do a review and make strategic decisions but in what direction.... that is anyone's guess. It's as if his pronouncement opened a can of worms. And when the public realizes their lack of specific answers to real problems , the future does look bleak for this company. So, if I were Heins, I think it is time he comes up with real solutions to their problems and minimize the uncertainty of the future of this firm, before the public wizens up.
My first trade was the blackberry-maker, Research in Motion (RIMM). Because it was my first time to use the E*Trade platform, it took me some time before I got the hang of buying stocks there. So it was around past 10PM Manila time when I finally bid for RIMM at $14.05.
I knew from the start that this is a speculative trade. They have a shrinking market share, lower than expected low earnings, significant inventory write-downs , and the list goes on. In the midst of the mass resignation of the top brass in that company, they got a new CEO, Thorsten Heins, who promises to make strategic decisions over the course of the year to respond to the company's continued decline in sales, and one of those options is selling the company or part of it to another company. RIMM attracted many suitors. And why not? The company has 75 million users and garners 17% of the market share. Its Blackberry is still considered a premium product among the corporate market. I mean, no less than the US President is using it. And this is an attractive stock at this point, having a P/E ratio of around 4 , when industry average is around 26. This stock is trading almost at the low end of their 52-week range. But what set this stock price to soar up last Friday was the rumor of a buyout.
As for me, I continue to be in the dark. The market appreciated that the new CEO is addressing the company's problems head-on but what is glaring to me is the lack of specific strategic plans in his announcement. He merely discussed their desire to do a review and make strategic decisions but in what direction.... that is anyone's guess. It's as if his pronouncement opened a can of worms. And when the public realizes their lack of specific answers to real problems , the future does look bleak for this company. So, if I were Heins, I think it is time he comes up with real solutions to their problems and minimize the uncertainty of the future of this firm, before the public wizens up.
They should have jumped onto the Android bandwagon when they had a chance. It seems that the market has no room for a third smartphone OS. Same thing is happening to Nokia, with its decision to use Windows Mobile.
ReplyDeleteGreat blog, by the way. It has a little of everything that I love in life.
Hi Investor Juan, my pleasure to see you dropping by my blog. You have a great blog yourself and lots of followers. I like the way you explain financial concepts that can easily be understood by the common man.
DeleteYou are right about Nokia. Once on top of their game, and now, it's merely eating the dusts of Apple and Samsung. Its price now reached below their 52 week low. They are cutting heads now and doing aggressive marketing on their Lumia. But what baffles me to no end is why they are giving out such generous dividends when they have cash problems? tsk... tsk... Time to face the music for these people. They will NEVER go back to where they were. But at least they can still cater to the lower priced mobile for those who cannot afford Iphones. They are still the leader in SAMENA region anyway. And they are going to make Lumia cheaper too. It would be interesting to follow their stock price till end of this year.