RIM Stock Is Only For Short-Term Trades Despite BB10

While I don’t think RIM Stock will disappear any time soon, the collapse of RIM Stock shows that this company is not for buy and hold investors. Research In Motion Stock  has made a nice jump from $6.50 to $12.00 recently, but despite what appears to be a very nice short-term bounce, this latest run-up does nothing to assist investors still holding RIM stock from prices as high as $145 all the way down to $20.00.

Research in Motion on Dec 6 outlined incentives to its biggest customers to use its new BlackBerry 10 devices. These big customers are corporations and governments who feel that BlackBerry devices have a higher level of security among the various smartphones available. The BlackBerry 10 devices is seen by many at Research In Motion as a chance to revive their fortunes. These devices will launch January 30 and efforts to convince the largest customers to stay are being focused squarely on enterprise customers who still value BlackBerry’s security features which remain the best in the smartphone industry, at present.

Research In Motion claims these devices will be faster and smoother than previous BlackBerry devices and will have a very large catalog of apps available, something BlackBerry has been sorely lacking.  The plan is to offer online training and webcasts and then provide free trade-up licenses and services to keep corporate and government customers glued to BlackBerry devices and retain what remains of BlackBerry’s market share.

In my opinion this is a constructive move by RIM to get enterprise customers to consider moving to BlackBerry 10 but I don’t see why customers who have left RIM would ever return for BlackBerry 10. RIM Stock faces enormous hurdles before it will ever recover to the 2008 high of $148.00. Customers aside, technically RIM Stock has so many levels of resistance to overcome that customers anywhere above probably $30.00 will have to decide whether to write off their investment or struggle through years of trying to average down which basically means risking even more capital to try to save capital.

Looking at the 5 year chart below the Collapse of Research In Motion Stock is a text-book study of how a company can lose its way when management loses focuses on their customers and their product lines. Spending time fighting for hockey and basketball franchises and refusing to acknowledge competitors let alone the continuing needs of existing customers were the major factors leading to the collapse of Research In Motion and their stock.

RIM Stock Collapse

5 Year Chart Of RIM Stock Collapse

Research In Motion Stock Is For Traders

Presently RIM Stock is now of value only to traders. This is not a stock for buy and hold and certainly institutional investors who have received third degree burns from the collapse of RIM Stock will have limited interest in the stock.

Looking at the option premiums being offered I see no reason to get involved in the options for Research In Motion Stock. The premiums are no more compelling than many other stocks that trade within the same price range. There are so many stocks to choose from for options trading. Why pick a stock that can easily end up being problematic from the beginning when there are other stocks that are trading within stable ranges that make option trading of many styles profitable and easier to manage.

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