Uccmal Posted March 2, 2012 Share Posted March 2, 2012 Yacktman, Watsa and Einhorn all own a piece. Worth another look? Nope, Still a long way to go. Not one of their existing products measures up to others on the market. They have to somehow leapfrog the competition or find another business to grow into. Link to comment Share on other sites More sharing options...
Phoenix01 Posted March 3, 2012 Share Posted March 3, 2012 Uccmal, I am not with you on this one. I think that the core business is reliable, secure e-mails for professionals. The fact that the Blackberry is cool struck a chord in the general public and spawned the secondary business of e-mails for private use. This second market is much bigger than the first and has been gobbled up by Apple & Google. The professional market around the world still needs the Blackberry and this market keeps growing, but not as fast as the secondary market. I think that the Playbook will be the extension of the Blackberry as a professional tablet that will run business / meeting application seamlessly and become the business standard. We are talking about a $7B company with $20B in sales and that has already generated $1.8B in operating cashflow during the first 9 month of this year. On top of that we get Prem on the board. To me this level of pricing is ridiculous and offer one of the most compelling opportunities in the market today. Link to comment Share on other sites More sharing options...
Uccmal Posted March 3, 2012 Share Posted March 3, 2012 phoenix, At least do yourself a favour and wait for the next earnings. I can guarantee that their Canadian and US absolute numbers will be lower still. They have to get the next version of the op system out and make it really good or they are going to get killed. I cant even begin to tally up the number of former BB users I know who have got Iphones now. BB, including the playbook, dont measure up any more. I am not saying they wont recover, just figuring that you will have plenty of time to buy the stock cheap, as in years. Link to comment Share on other sites More sharing options...
prevalou Posted March 3, 2012 Share Posted March 3, 2012 Apple: 508 B$ market cap versus 7 B$ Rimm. It would be quite surprising if Rimm didn't lose market share to Apple at the present Time. The question is: what Will happen in a couple of years, say 10 years from now ? Will the IPhone 17 still dominate the field ? What about security, network efficiency, battery life ? Will nobody care like today ? Or Will business peuple get annoyed to have their phone out of battery in the middle of their meetings ? What is the risk/reward for Rimm and for Apple ? Link to comment Share on other sites More sharing options...
Liberty Posted March 3, 2012 Share Posted March 3, 2012 Will the IPhone 17 still dominate the field ? What about security, network efficiency, battery life ? Will nobody care like today ? Or Will business peuple get annoyed to have their phone out of battery in the middle of their meetings ? What is the risk/reward for Rimm and for Apple ? I don't think you can look that far. It's possible that by then a totally new player will dominate, or that the iPhone will have the best security of all (after all, when Apple decides to do something, their execution is usually very good), or whatever. In fact, RIM's in a worse position than Apple to have the best security of all in 10 years because they first have to survive that long.. Link to comment Share on other sites More sharing options...
rmitz Posted March 3, 2012 Share Posted March 3, 2012 Apple: 508 B$ market cap versus 7 B$ Rimm. It would be quite surprising if Rimm didn't lose market share to Apple at the present Time. The question is: what Will happen in a couple of years, say 10 years from now ? Will the IPhone 17 still dominate the field ? What about security, network efficiency, battery life ? Will nobody care like today ? Or Will business peuple get annoyed to have their phone out of battery in the middle of their meetings ? What is the risk/reward for Rimm and for Apple ? Battery technology (and power efficiency) is only getting better over time, so it's unlikely that there will be that much of a problem in the future. People tend to learn some new habits when needed; instead of carrying a bunch of batteries with them (and remembering to charge them, etc) they will plug in their phone more regularly. Or they can use an external "battery" as a charger (this product has existed for some time, solving the problem for some die hards--it's barely different from carrying extra batteries). Security I would wager will also get better (it certainly has been in the PC world), but that's the balance of new features vs security--true security will require a much less featureful phone, but to be honest, the current offerings aren't bad if you follow best practices. RIMM could be a huge success, but I wouldn't bet on it. In the next 10 years I see a significant possibility of a zero in RIMM. I do not see a zero for AAPL in the next 10 years, in fact in the next 10 I think continued profits are likely. At some point, a decline is inevitable. If someone held a gun to my head, I would buy AAPL with no hesitation in the choice between the two. Link to comment Share on other sites More sharing options...
prevalou Posted March 3, 2012 Share Posted March 3, 2012 I am quite surprised people talk about Rimm as if it was in terminal position with a lot of debt and negative cash flow. That was the case with Motorola mobility, the business interested Google and it was sold for 12 B $. Presently Rimm has more than 1b$ in cash, no debt and an annuity like business which can slow the bleeding,if it ever comes, until a decent phone emerges. Link to comment Share on other sites More sharing options...
Guest valueInv Posted March 3, 2012 Share Posted March 3, 2012 I am quite surprised people talk about Rimm as if it was in terminal position with a lot of debt and negative cash flow. That was the case with Motorola mobility, the business interested Google and it was sold for 12 B $. Presently Rimm has more than 1b$ in cash, no debt and an annuity like business which can slow the bleeding,if it ever comes, until a decent phone emerges. RIM is in a terminal position not because of it's finances but because of a lack of a competitive platform. These are not competing phones but platforms with an ecosystem of apps, accessories, content and partners. Even if RIM were to release a competitive phone at the end of the year, most of the partners have written it off and are unlikely to invest in it. Then all you have is a nice shiny phone with little you can do with it. With few apps, few people will buy it (even if it has great security). An app developer has to release multiple versions of IOS, multiple versions of Android, Windows mobile, etc. Where in the list of priorities will RIM be? If you had scarce development resources, would you put any on a new RIM platform? That is RIM's problem. Link to comment Share on other sites More sharing options...
prevalou Posted March 4, 2012 Share Posted March 4, 2012 Not one insider agrees with me except Lazaridis who increased his ownership in february...but the man who grew the company from scratch to 20B$ in ten years is considered a has been by the majority of people who never created anything...It is like wall street: people in rolls royce being advised by people taking the tube... :) This discussion about apps reminds me American Express. The company in the 90s was considered a value trap because its network was a lot smaller than Visa and MasterCard. But what was important was that spending by card was bigger than with Visa and MasterCard and that customers liked the rewards. The size of the network was not the main point. If developpers earn more with Rimm apps the network will survive. Another possibility is the web becoming a gigantic world of apps leveling the competition on this field. Link to comment Share on other sites More sharing options...
prevalou Posted March 4, 2012 Share Posted March 4, 2012 - Lazaridis: Check the facts - Amex: in 1994 the restructuring was done. The stock remained undervalued in 1995, 1996, 1997, etc. And the argument was about the network size and the anti-competitive position of Visa and M astercard. Ok for the argument about stability versus Rimm. I'd like to have names of mobile companies which were at the top before becoming 0. - But following your argument Apple could be a zero in a couple of years...you pay dearly for a cheery consensus... Link to comment Share on other sites More sharing options...
prevalou Posted March 4, 2012 Share Posted March 4, 2012 The fact that Microsoft succeeded in creating a third ecosystem shows that network size can be beaten by network quality. Link to comment Share on other sites More sharing options...
Hielko Posted March 4, 2012 Share Posted March 4, 2012 There is a reason that Apple is actually trading at a pretty low P/E based on historical growth, especially if you take in account the huge cash position of the company. The current stock price does reflect the possibility that the future isn't going to be that bright for AAPL. AAPL is certainly not a happy high-tech company trading at 100x P/E because people think the sky is the limit. Hard to know if it's priced in sufficiently, but don't think it's obviously overpriced either. And while you never know what's going to happen in the world of technology, it's obviously that Apple does have some very big competitive advantages at the moment that are all working together. It's shocking how high their profit margins are while competitors are struggling to offer comparable products at marginal margins (small example: I own a Macbook Air, and I would actually prefer to own a Windows notebook with a similar size/weight/computing power/screen and it's simply not possible unless I buy something twice as expensive as the Air). Their economics of scale are huge, they can afford to spend more money on R&D/phone than anybody else, be able to create a superior product and ask for premium prices, while spending less/product that competitors. And of course, the platform is very sticky as well; there is a real hurdle to overcome to convince people to move to a different platform. And exactly the things Apple has, is the stuff that Blackberry doesn't. They are losing the critical mass that's needed to stay in the game, and customers that you lose aren't easy to reacquire. I don't have a position in AAPL or RIMM, but you need to think really hard about the sustainability of the RIMM business model if the company continues to lose market share. At some point that will become a vicious circle that's nearly impossible to break. Link to comment Share on other sites More sharing options...
prevalou Posted March 4, 2012 Share Posted March 4, 2012 What you say about Apple now could have been said about Microsoft in 2000. What you say about Rimm now could have been said about Apple in 2000. Link to comment Share on other sites More sharing options...
Guest valueInv Posted March 4, 2012 Share Posted March 4, 2012 - Lazaridis: Check the facts - Amex: in 1994 the restructuring was done. The stock remained undervalued in 1995, 1996, 1997, etc. And the argument was about the network size and the anti-competitive position of Visa and M astercard. Ok for the argument about stability versus Rimm. I'd like to have names of mobile companies which were at the top before becoming 0. - But following your argument Apple could be a zero in a couple of years...you pay dearly for a cheery consensus... If you want to reason by comparison, I would recommend Palm as a good starting point. ;) Link to comment Share on other sites More sharing options...
prevalou Posted March 4, 2012 Share Posted March 4, 2012 I didn't remember Palm had a network or was a mobile phone company ;). But maybe you consider Rimm as a handset maker :-\ Link to comment Share on other sites More sharing options...
Guest valueInv Posted March 4, 2012 Share Posted March 4, 2012 I didn't remember Palm had a network or was a mobile phone company ;). But maybe you consider RIM as a handset maker :-\ I think of RIM as a company whose future is very dependent on having a competitive handset platform. Link to comment Share on other sites More sharing options...
Hielko Posted March 5, 2012 Share Posted March 5, 2012 What you say about Apple now could have been said about Microsoft in 2000. What you say about Rimm now could have been said about Apple in 2000. Yes, and MSFT did have a competitive advantage 10 years ago and it still does. Difference between MSFT 10 years ago is that MSFT was trading at a ~40 P/E while AAPL is now trading at a 13.5 PE adjusted for cash. If you would have been able to buy MSFT 10 years ago at the same type of valuation you can buy AAPL right now you would have done great the past 10 years. And yes: you can say the same things about AAPL 10 years ago as you can about RIMM now, but the success of Apple was not just some 'mean reversing'. It's probably the biggest successful turnaround story ever. Most failing business will look attractive if you expect something like that. Link to comment Share on other sites More sharing options...
prevalou Posted March 5, 2012 Share Posted March 5, 2012 between zero and 508 B$ there is some middle ground...exaggeration by market participants is the friend of the investor. Even Palm was purchased by HP for 1.2 B$ (about 1 time sales of the best years). If I apply the same ratio for Rimm, it would be 20 B$ (ev is less than 6 B$ today). To say Rimm is a failing business is starting with the conclusion. Time will tell... Link to comment Share on other sites More sharing options...
prevalou Posted March 5, 2012 Share Posted March 5, 2012 Have you other names in the mobile phone industry which corroborate your law of being at the top of the industry to failing to zero ? Link to comment Share on other sites More sharing options...
prevalou Posted March 5, 2012 Share Posted March 5, 2012 I don't see any zero on your list as I suspected, but businesses that are worth more than RIMM (Nokia, Motorola, Microsoft, even LG ). Sun is not a phone company. By the way, insults are not a substitute for facts ;) Link to comment Share on other sites More sharing options...
ERICOPOLY Posted March 5, 2012 Share Posted March 5, 2012 Is it just me or does every character in the movies these days use an IPhone and a MacBook? I think there's a lot more to this game than just the technology. Link to comment Share on other sites More sharing options...
WarrenWatsa Posted March 5, 2012 Share Posted March 5, 2012 How about just looking at RIMM as a pure asset play and ignoring earnings...a la SHLD. You're basically getting intangibles and any future earnings for free not far below RIMM's current price, depending on how conservative you want to be on estimating liquidation haircut. Link to comment Share on other sites More sharing options...
prevalou Posted March 5, 2012 Share Posted March 5, 2012 Nokia ( the near zero business according to some who know the industry) sells at three times net tangible value versus 1 for Rimm, so your view makes sense. Link to comment Share on other sites More sharing options...
WarrenWatsa Posted March 5, 2012 Share Posted March 5, 2012 How about just looking at RIMM as a pure asset play and ignoring earnings...a la SHLD. You're basically getting intangibles and any future earnings for free not far below RIMM's current price, depending on how conservative you want to be on estimating liquidation haircut. and what are those assets values, other than cash which can be used up? also who is allocating capital at rimm and what is their track record? eddie lampert is pulling the strings at shld, which is Asset rich. See the table in the middle of this page as an example: http://seekingalpha.com/article/314359-rim-s-a-buy-with-compelling-risk-reward-after-weak-earnings I think there's an asset-based floor near Dec.'s low (not far from today's low) - and maybe higher depending on how generous you want to value tangible assets. Otherwise, you wouldn't see guys like Einhorn, Cooperman et al jumping on recently. I can't see them buying RIMM unless they're looking it as a pure asset play around the current price. Link to comment Share on other sites More sharing options...
WarrenWatsa Posted March 5, 2012 Share Posted March 5, 2012 But we can pretend there is asset value in a tech company that lost it's mojo. companies are worth what they can "earn" for owners. You don't make any sense. You sound like those guys who can't understand why SHLD could be a great deal at around $30 (when Lampert pumped $150M into it). The tangible assets RIMM has on its B/S have a certain value no matter what (unless you think things like receivables, investments, PPE, are worth $0 - and if you do, you're at the wrong website). The more distressed the company is, the less the value you would assign. The fact that RIMM has lots of cash, positive earnings, and no debt, means the haircut on its tangible assets wouldn't be huge. This is all ignoring the intangibles, of course, including their valuable patent portfolio. As far as I know Einhorn, Cooperman, Yacktman, et al are still holding. The best price they could've gotten is not far below today's low. In fact, there's a good chance some or all of them have a cost at or above today's price. These guys are not short-term traders. Link to comment Share on other sites More sharing options...
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