Bought some RIM today... Let's see if my PR intuitions are correct

Well I bought some shares in RIM today. I bought some at $7.54 a share on the TSX.

While I'm a strong proponent of staying OUT of the stock market for the next year (perhaps even longer) given what I believe to be the possibility of a serious crash, I've made an exception in buying some RIM.

If I've misjudged the bottom (a risky thing to try and do any time) I'll quickly get out should the share price fall another five per cent.

Having said that, my reasons for getting in at this point are pretty simple (and mostly PR related):

• The 'bad news' cycle is now over.
  
• The stock has been slaughtered and basically all the dirty laundry is now wide out in the open. It's hard to imagine any negative news events over the next month or so that would receive any attention.
  
• With Q1 behind it, the discussion over financials will disappear for the next three months. Even Q2 and Q3 have had such revised expectations placed upon them, that RIM's stock price will likely not fall further based on these considerations.
  
•  The speculative news cycle should start up soon
  
• The media coverage of RIM the other day was just disastrous. There were literally thousands of articles proclaiming the company dead after the Q1 results. It was, I believe, a smorgasbord where in the media feasted heartedly on RIM's corpse. Yesterday was tear RIM's heart out day. You only get to really dig in to a company's flesh with gusto one or two times during it's downfall, and yesterday was clearly one of those times.
  
• With the feast now completed, the media will start to turn its attention towards speculation over where RIM goes from here. This speculation cycle, I believe, will inherently entail exposition on the various value components of RIM. As the media talks up these value components the narrative will act to counteract those who believe RIM is worth next to nothing. We should see a rise in investor confidence in the stock as a result (not that it will ever return to $140 a share, or even $20 a share... but at $7.54 a share, even the slightest positive narrative could bounce the price up to $10 a share).
  
• Case in point of my above thesis, the National Post has already turned the corner (rather quickly I might add). Compare the headlines / stories that ran the day Q1 was reported and what ran today
• RIM’s options now ‘sell, break up or die,’ analysts say as shares plunge 20% (what ran right after the Q1)
• Andrew Coyne: Possible sale of ‘Canadian icon’ RIM will be test of foolish foreign ownership laws (what ran today - as you can see, the narrative is now shifting away from the story of how RIM failed to what's next for RIM)
  
• RIM now has no prom date
  

• Before Q1 RIM was projecting a narrative of self sufficiency. That it didn't need anyone and that its BB10 strategy was going to help it rise from the ashes like a phoenix. That narrative is now DEAD. Which means RIM can move on to the next narrative, which is serious discussion (not publicly mind you) of partnership and acquisition possibilities. RIM needs a date to the prom and it must now stop holding out for the football quarterback and start taking other offers more seriously
  
• There are plenty of 'synergistic' narratives that could come from this. Microsoft is a logical suitor. Both RIM and MSFT are deeply embedded in the enterprise market and if MSFT wants to stay deeply embedded, and keep Google and Apple out of the enterprise, they need to soak up anything enterprise related. Buying RIM and all the possible synergies on the enterprise side that come with that, would definitely excite the markets.
   
• People (not everyone mind you) still like RIM
  



Obama with his Blackberry

• We have to remember that the blackberry is still used by governments and corporations around the world. There are people who still love their RIM. While this doesn't mean they will grow, it does mean that they will keep selling product for the foreseeable future (don't expect blackberry sales to drop to nothing over the next year).
  
• Additionally, Apple and Google's dominance are primarily marketing based. I've criticized RIM for a long time regarding their marketing. Because they were inept at consumer marketing (no surprise given they were 1) Canadian and 2) had their origins in the enterprise) there's this perception that blackberry's suck. But they don't suck. Admittedly I have an Nexus S (Android), but I have to be honest, if I was buying a phone again I'd really be torn between a RIM and the Nexus S. The reason? RIM's keyboard and battery life, these are two MAJOR drawbacks with the Android (or rather, not drawbacks, but not as good as what I remember when I had a RIM).
  
• While apps are all the craze, they are, after all, just that, a craze. There are maybe 12 apps I use on my Android phone, most, if not all of which I could get on the Blackberry. My point is that applications aren't what's going to destroy RIM, it's the perception that RIM phones are the equivalent of buying a brick while Google and Apple are sex-ahhhh.  It's purely a marketing issue. Yet again, rumours of RIM perhaps using MSFT's OS would be something that would definitely excite developers (something RIM was not willing to consider before, but now, who knows, maybe they are).
  
•  Is RIM 'too big to fail'?
  
• Back stopping everything going on with RIM is the question: Is RIM to big to fail for Canadians?
  
• I won't get in to a big rant about what is going on with the world today, but we are living in a too big to fail world. One in which countries have to back stop their biggest corporations or the country itself suffers. Is the Canadian government ready to let RIM fail? Doing so would essentially be turning its back on the future of technology in Canada. Perhaps it is, but perhaps it's not as well. I wouldn't be surprised to see the Canadian gov somehow get involved with RIM in a way that props the company up a little (for instance making blackberry's the mandatory device for all government employees or modifying foreign investment rules).
  
• Lastly, when the pupil is ready, the teacher will appear.
  

• The old zen saying is when the pupil is ready the teacher will appear. What this has always meant to me is that when your ego has been put aside, you are ready to learn. Until then you are too invested in whatever pre-conceived notions you have and to get you to consider other options is too much of a battle.
  
• The biggest obstacles to RIM's success has been.... RIM! They've been stuck in a mindset of we know what we are doing leave us alone. As a result, they've been closed off to possible ways forward. Now that their ego has been destroyed (it's impossible to imagine that there is any hubris left within the halls of RIM), they are free to look towards the future and consider options they may never have considered before. As such, its entirely possible that they will find an interesting way forward (whether that be via partnerships, acquisition, or something else entirely).

So there you have it, the reasons I bought some RIM today. 

Don't get me wrong, RIM is a dog. For all those investors who bought RIM at 140, 100, 80, 60, 40 or 20 bucks a share... they will never get their money back. RIM has cut the throats of all those investors over and over and over again. 

I bought RIM shares based on the notion that Q1 was a purge moment. 

It was the moment in which the company purged all the bad news it had to purge, where those praying for a RIM miracle finally purged themselves of such hopes (hence the 20 per cent sell off), where unfortunately employees (ie. costs) were purged and where RIM purged itself of this silly narrative its been pushing that everything was going to be O.K.

If I'm correct and the purge is over, then this may mark the day RIM hit rock bottom (operationally, if not in the stock price) and had its come to Jesus moment. 

Could RIM keep falling? Of course. If the items I've listed above turn out to be misguided, then the stock will continue to drop. That said, I do see upside in RIM at these prices. I'm not saying RIM will be saved in the long run, just that it only has one foot in the grave right now but is being priced as though both feet are.