12:21 ET
Research In Motion (RIMM) 11.92 +1.46: This maker of the wireless Blackberry device is in motion after reporting a narrower than expected loss last night by a full nickel. Among the handhelds, RIMM is rightfully seen as the best positioned. Its devices allow the user to safely access its internal network passing reliably through the firewall. While other device makers aimed to perform a lot of different applications, RIMM's Blackberry product focuses on text messages particularly email. Also, you don't need to retrieve your email. Your email finds you with no dialing-in, no initiating connections, no antennas to raise. They are very popular in the workplace (lovingly referred to as Crackberry), which is a more lucrative and stable market than the consumer market. However, its the enterprise market outlook that has been weighing on the shares. IT managers remain cautious about opening the wallets at this point despite RIMM having a strong portfolio of upcoming handheld and software products... Despite the IT weakness, there are reasons to like the stock. Importantly, the company reiterated its goal of reaching breakeven by FebQ. Also, the company has $616 mln in cash/inv, or about $7.85 per share. RIMM expects to burn through about $80-$90 mln ($1.08 per share) excluding acquisitions and share repurchase over the next 9 months. So it looks like cash will remain solid through to breakeven. This cash level should offer some downside protection for investors. In the short term, investors will unfortunately remain focused on the subscriber adoption numbers which have not been great in the IT market. This should keep the near term upside limited, but if the stock keeps declining, it's worth consideration. RIMM is not Palm or Handspring. It's much more focused and has the balance sheet to be a survivor. -- Robert J. Reid, Briefing.com
Briefing Story's 7/3/02 |
