RIM (RIMM) Short Interest Increases as Investor Skepticism Grows
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We'll admit it: whenever we think about RIM we still picture the smarmy smug of Mike Lazaridis and plucky thick-headedness of Jim Balsillie.
The duo took RIM to the top, but that doesn't mean much when the stock has fallen over 90 percent since the middle of 2008.
But RIM isn't the Dastardly Duo's baby anymore; that's the responsibility of one Thorsten Heins. Amid Heins being handpicked by RIM's (Nasdaq: RIMM) Board, investors are prepping for the worst.
Short interest in RIM has grown to more than 59 million shares through February, the highest point since January 2004. Analysts aren't much more optimistic: five of 53 total analysts covering the stock having a Buy-equivalent rating, 33 have a Hold, and 15 have a Sell.
Though RIM has gained traction in emerging markets, many believe those sales aren't enough to make up for a significant downturn in the U.S. market. For its most recent quarter, RIM reported a 45 percent drop in U.S. sales.
Other major overhangs are aplenty for RIM and its shareholders. Heins isn't likely to sell the company, a standing which has been echoed since at least 2009 to early 2010 by Lazaridis and Balsillie. Plus, with Lazaridis and Balsillie still holding significant stakes in the company, a vote to sell would be tough.
Also, Heins is banking on the company's BB10 operating system. Expected to at least debut in late 2011, the OS has been pushed back numerous times; the latest expectations suggests a late-2012 release. Many have high hopes for the QNX-based system, which has gotten largely positive reviews from those who have toyed with mockups. Until some solid info is released, however, no real reason for shareholders to make a bet.
Who knows where the large short-interest lies. With RIM shares down more than 20 percent since bumping up against $17.50 and $18 in mid January, investors and traders might want to get ready for a squeeze as shorts start taking profits on their downside wagers.
Shares are about 4 percent better on the session.
The duo took RIM to the top, but that doesn't mean much when the stock has fallen over 90 percent since the middle of 2008.
But RIM isn't the Dastardly Duo's baby anymore; that's the responsibility of one Thorsten Heins. Amid Heins being handpicked by RIM's (Nasdaq: RIMM) Board, investors are prepping for the worst.
Short interest in RIM has grown to more than 59 million shares through February, the highest point since January 2004. Analysts aren't much more optimistic: five of 53 total analysts covering the stock having a Buy-equivalent rating, 33 have a Hold, and 15 have a Sell.
Though RIM has gained traction in emerging markets, many believe those sales aren't enough to make up for a significant downturn in the U.S. market. For its most recent quarter, RIM reported a 45 percent drop in U.S. sales.
Other major overhangs are aplenty for RIM and its shareholders. Heins isn't likely to sell the company, a standing which has been echoed since at least 2009 to early 2010 by Lazaridis and Balsillie. Plus, with Lazaridis and Balsillie still holding significant stakes in the company, a vote to sell would be tough.
Also, Heins is banking on the company's BB10 operating system. Expected to at least debut in late 2011, the OS has been pushed back numerous times; the latest expectations suggests a late-2012 release. Many have high hopes for the QNX-based system, which has gotten largely positive reviews from those who have toyed with mockups. Until some solid info is released, however, no real reason for shareholders to make a bet.
Who knows where the large short-interest lies. With RIM shares down more than 20 percent since bumping up against $17.50 and $18 in mid January, investors and traders might want to get ready for a squeeze as shorts start taking profits on their downside wagers.
Shares are about 4 percent better on the session.
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