Investors who bought this stock all the way
down have in fact, bought what is commonly referred to as a
"falling knife" or as the slogan suggests, they have bought
into a stock with a lot of downward momentum believing they
have bought it near the bottom, only to find out that it
"sliced" right through their prices and fell a lot further.
"Falling knives" can damage a portfolio.
The truth to the collapsing of Research In
Motion stock is one of perception. RIM dominated the
wireless handheld market and with limited competition they
quickly outpaced everyone. Their Blackberries were the
"cool" tech toys of the moment and I can recall lots of my
friends showing off their Blackberries. I too enjoy and
still use my blackberry for stock trades, messaging, web
surfing, GPS, scheduling and reminders and lots more. They
have security that outpaces any of their competitors.
Remember when "Crackberry" was the slang
used to describe users totally addicted to their Blackberry
devices. I remember friends developing carpal tunnel
syndrome from typing so much and so quickly. Without
question, this was a market that Blackberry dominated. But
while Research In Motion owner Jim Balsille spent time
trying to buy an NHL Team and the company itself seemed
focused on other things and not their core business, Apple
developed and released the IPHONE which they promoted as
"THE COOLEST" tech toy to have. Not only did Research In
Motion ignore the Apple competition, but they seemed
oblivious to all the other market entrants including the
The perception on Research In Motion is that
it is holding a declining market share and will end up like
Palm or a dozen other companies that fell by the wayside.
The perception is that RIM's products cannot compete and are
not the "cool" tools.
RIM must change this perception. Remember the days of "Crackberries"
and even US President Obama commenting on how he couldn't
"live without his Blackberry". RIM has done a terrible job
defending its turf. When you are number 1 its hard to stay
number 1 and it requires focus and being consistently
smarter than the "other guys". RIM has failed miserably in
bringing to the attention of consumers and business all the
terrific features and security levels that are way above
competitors. Now they face an enormous uphill battle.
RIM's stock has followed the decline in RIM's popularity all
the way down. It will be a very difficult battle to regain
the lost market share and momentum and the majority of
investors are indicating by dumping shares that they doubt
this can be accomplished. My own personal opinion is that it
is indeed difficult for most companies to recover market
share and a return to the lofty share prices that once
As I indicated in my previous posting on Research In
Motion stock - RIM was never a stock for the buy and
hold investor and should never have been sold to
investors as such. It has always been a stock for
traders and option investors. The volatility of RIM is
excellent for option premiums and makes trading the
stock profitable. It can and has been a graveyard for
many buy and hold investors.
I believe it is important to understand that RIM not
only dropped the ball, but they didn't even want to play
the game. Let's hope for RIM's sake that it is just half
time and they can get back in the game.