Stock Investment Shocker As Research In Motion Stock Plunges

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Research In Motion Stock is without doubt not meant for stock investment portfolios. The second quarterly loss of .37 cents versus an expectations of loss of .03 cents, is like a death knell. The loss in Research In Motion Stock once it opens will probably be enormous. Research In Motion Stock is heading to $5.00. It is incredible to think that Research In Motion Stock was at $138 in June 2008. Research In Motion Stock did a 2 for 1 split on June 7 2004 and a 3 for 1 split on August 21 2007.

Research In Motion Stock Emails Received

In the last hour I have received a lot of emails about Research In Motion Stock including a lot from investors who went for the strangle option trade I described in an earlier article. Everyone had an interesting story to tell and I thank all readers who emailed me.I enjoyed all your emails.

One gentleman stands out though. He bought 300 put options at the $8.00 strike for .14 cents for a total investment of $4200.00. With the stock after hours below $8.00 here is what he wrote me:

“Thank you, thank you, thank you. I read your article late in the day, bought in and went for the strangle option. I have no idea what it will be worth tomorrow morning but I will be cashing out and buying a new car! I know you don’t gamble and yes it was a gamble but the strangle option made a lot of sense. I love your site and can’t believe it’s free.”

I have to mention that my site is basically free because I love investing and I felt after so many years of learning it would be great to share strategies I have learned and benefited from and I felt that the internet allows this. I would like to mention though, to the above reader, that donations are always greatly appreciated. ( I am laughing just now)

Research In Motion Stock 6 Year Chart

As far as a stock investment goes, Research In Motion Stock for long-term investors has been a disaster and an indication of the failure of buy and hold. Millions of investors are sitting with enormous losses in Research In Motion Stock. The six-year chart below shows the incredible collapse of this company.

Research In Motion Stock

As a stock investment Research In Motion stock is a great example of why buy and hold fails.

Research In Motion Stock Bought By Smart Money Managers

Research In Motion Stock is also a good example of how even smart money managers make big mistakes. Last fall with the stock trading between $30 and $13.00 Leon Cooperman’s New York-based hedge-fund operator Omega Advisors Inc. bought 1.43 million shares of Research In Motion Stock. In November Cooperman reported that RIM’s new operating system will “surprise people.”

In December 2011 Laszlo Birinyi recommended Research In Motion Stock as a “long shot” with the stock trading between $16 and $13. Investing is filled with mistakes. Research In Motion Stock shows the value of not listening to analysts and media outlets but following the stock itself which has been in a decline for over a year.

Stock Investment Should Never Include These Types Of Companies

Research In Motion Stock is a prime example of why buying and holding into a company that is not diversified rarely works. It also explains why I believe it is so important for investors to select dividend paying companies that are diversified, even if just within their own industry and have solid track records of earnings growth. When earnings begin to slip it is time to get out.

Companies like Research In Motion are not stock investment grade for buy and hold strategies. Today the company has announced another 5,000 jobs will be cut and Blackberry 10 will be delayed until the 1st Quarter of 2013.I believe it is questionable if the company will have enough capital to bring Blackberry 10 to market. This is incredibly sad considering their subscriber base increased in the last quarter.

There once was a time when Blackberry users were called Crackberry users. This was the market that Research In Motion owned. It is not theirs any longer.

  • Nirmal

    Hi Teddi
    Is it a good idea to BUY RIMM PUT now?
    If you think that it is heading for $5.00 I am thinking of BUYING
    RIM DEC 7 PUT for 64c.
    I will appreciate your opinion about this trtade.
    Thanks
    Nirmal

  • Hi Nirmal;
    I don’t know what is going to happen to RIMM stock tomorrow. In the after hours the stock was down I think 20%. That will definitely impact the put options premiums for tomorrow. You may want to wait and see if there is a bounce in the stock before buying puts. I think the big money was made in RIMM Stock 6 to 8 months ago by those who bought leap puts at that time. If you are thinking of buying puts now I would wait for a bounce and go for a spread or at least sell some out of the money calls to cover the cost of the puts, although if the puts are cheap enough maybe its a gamble trade again and you are willing to risk some capital. RIMM Stock I don’t see as a great trade and definitely the stock is not worth buying at all. The puts though will have to be a personal choice. Not my choice for a trade for sure. I am way too conservative.
    Teddi