Bloomberg ran a story today saying that RIM customers are actively engaging contingency plans to switch to other vendors should RIM cease to exist. You can read the article here.
The story today sent RIM shares crashing back down five per cent.
I love Bloomberg as a media outlet and they do great reporting (much better than CNBC for instance). But I've got to say, this was a bit of a hit piece.
It's easy to find 5, 10 or probably 200 customers (RIM has thousands after all) who are worried and considering using more Android / iPhone devices as a result.
You could also, if you wanted, probably find 5, 10 or 200 customers who have tried using Android / iPhone in the work environment and had to toss the phones out and go back to RIM.
Similarly, Bloomberg could have easily just called the top Fortune 100 companies and asked 'What phone does your CEO use?". I'd be willing to bet at least 50 per cent of those CEO's are on a Blackberry (and the other 50 per cent probably wish that RIM had a competitive product they could use).
So I was slightly disappointed in Bloomberg's piece, as it took a few examples and came off as though enterprise customers are racing to get away from RIM, which there is no widespread evidence of.
To my investment thesis I'll be sticking with my RIM shares (now only up 5 per cent) for a little longer. Bloomberg revived the 'doom and gloom' narrative, but the 'what next' speculative narrative is still slowly emerging. I'm betting that the speculative narrative starts to ramp up after the AGM tomorrow (all hinging on RIM doing a good job addressing investor concerns).
Btw, you can listen to RIM's AGM tomorrow at 10 am at the following link.
While Bloomberg ripped a chunk out of RIM's neck, Heins continues to do interviews espousing belief in BB10.
Heins gave another solid interview with CIO magazine, which you can read here, and his messaging is getting better. He's owning up to past mistakes and emphasizing that BB10 is the company's future.
Like I've said in a past post, BB10 is everything for RIM. If BB10 is comparable to IOS or Android, then RIM is back in business (and you could easily see the stock shoot back up to 20 bucks instantly).
If BB10 is a failure, then that's it, RIM will be out of business within three months of launch. While they will have the cash to stick around longer, customers will be fleeing from them so quickly that there will be no point keeping the business going.
So the real question becomes, as it always has been, is Heins telling the truth when he says BB10 rocks?
I had thought that laying off 5,000 employees was a really bad sign for the company - a sure sign that they were looking to be acquired (you don't reduce your staff by 30 per cent if you are trying to remain competitive). If they 'know' BB10 is going to crush IOS/Android, why lay off 5,000 people?
However, now we have details on why. In order not to burn through their cash ($2.2B) between now and when BB10 is launched, they had to cut that staff. In addition, it's being reported they may have to spend up to $1B launching BB10.
So it looks like I was wrong about their acquisition strategy. It looks like RIM is going all in. It's BB10 or death!
Which does suggest that Heins has faith in BB10 because RIM could execute an exit strategy right now if it wanted to. Its talks with financial bankers may turn out to simply be the creation of a contingency plan should BB10 not work out.
Because the simple truth is that if RIM fails in the launch of BB10 they won't have 12 months to try and get acquired. They will have three months in my opinion. Within three months of a failed BB10 launch the stock will be worth pennies and no one will want to buy a RIM product knowing that they will be going out of business at some point.
Which yet again suggests that Heins must have faith in BB10 to take such a risk - this is one of the ballsiest risks I've seen a company take in a long time given RIM could simply execute on an exit strategy and still walk away with a nice pay day.
So quite the drama unfolding with RIM. The AGM tomorrow should be interesting. Can Heins convince people that BB10 is the real deal?
I'm not sure, but I'll listen in to find out.
I keep saying, RIM has got to get leaked video of key BB10 features out there. If the entire company is hinging on this one thing, then the only real way to inspire confidence is for people to at least catch a glimpse of BB10 features.
The story today sent RIM shares crashing back down five per cent.
I love Bloomberg as a media outlet and they do great reporting (much better than CNBC for instance). But I've got to say, this was a bit of a hit piece.
It's easy to find 5, 10 or probably 200 customers (RIM has thousands after all) who are worried and considering using more Android / iPhone devices as a result.
You could also, if you wanted, probably find 5, 10 or 200 customers who have tried using Android / iPhone in the work environment and had to toss the phones out and go back to RIM.
Similarly, Bloomberg could have easily just called the top Fortune 100 companies and asked 'What phone does your CEO use?". I'd be willing to bet at least 50 per cent of those CEO's are on a Blackberry (and the other 50 per cent probably wish that RIM had a competitive product they could use).
So I was slightly disappointed in Bloomberg's piece, as it took a few examples and came off as though enterprise customers are racing to get away from RIM, which there is no widespread evidence of.
To my investment thesis I'll be sticking with my RIM shares (now only up 5 per cent) for a little longer. Bloomberg revived the 'doom and gloom' narrative, but the 'what next' speculative narrative is still slowly emerging. I'm betting that the speculative narrative starts to ramp up after the AGM tomorrow (all hinging on RIM doing a good job addressing investor concerns).
Btw, you can listen to RIM's AGM tomorrow at 10 am at the following link.
While Bloomberg ripped a chunk out of RIM's neck, Heins continues to do interviews espousing belief in BB10.
Heins gave another solid interview with CIO magazine, which you can read here, and his messaging is getting better. He's owning up to past mistakes and emphasizing that BB10 is the company's future.
Like I've said in a past post, BB10 is everything for RIM. If BB10 is comparable to IOS or Android, then RIM is back in business (and you could easily see the stock shoot back up to 20 bucks instantly).
If BB10 is a failure, then that's it, RIM will be out of business within three months of launch. While they will have the cash to stick around longer, customers will be fleeing from them so quickly that there will be no point keeping the business going.
So the real question becomes, as it always has been, is Heins telling the truth when he says BB10 rocks?
I had thought that laying off 5,000 employees was a really bad sign for the company - a sure sign that they were looking to be acquired (you don't reduce your staff by 30 per cent if you are trying to remain competitive). If they 'know' BB10 is going to crush IOS/Android, why lay off 5,000 people?
However, now we have details on why. In order not to burn through their cash ($2.2B) between now and when BB10 is launched, they had to cut that staff. In addition, it's being reported they may have to spend up to $1B launching BB10.
So it looks like I was wrong about their acquisition strategy. It looks like RIM is going all in. It's BB10 or death!
Which does suggest that Heins has faith in BB10 because RIM could execute an exit strategy right now if it wanted to. Its talks with financial bankers may turn out to simply be the creation of a contingency plan should BB10 not work out.
Because the simple truth is that if RIM fails in the launch of BB10 they won't have 12 months to try and get acquired. They will have three months in my opinion. Within three months of a failed BB10 launch the stock will be worth pennies and no one will want to buy a RIM product knowing that they will be going out of business at some point.
Which yet again suggests that Heins must have faith in BB10 to take such a risk - this is one of the ballsiest risks I've seen a company take in a long time given RIM could simply execute on an exit strategy and still walk away with a nice pay day.
So quite the drama unfolding with RIM. The AGM tomorrow should be interesting. Can Heins convince people that BB10 is the real deal?
I'm not sure, but I'll listen in to find out.
I keep saying, RIM has got to get leaked video of key BB10 features out there. If the entire company is hinging on this one thing, then the only real way to inspire confidence is for people to at least catch a glimpse of BB10 features.
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