As for RIMM, here’s the discussion we had yesterday on TradingWithCody.com’s Subscriber Chat after the market closed:
December 20, 2012 – 5:12 pm
Actual EPS: -$0.22 EPS Estimate: -$0.35 EPS Surprise: +37.1%, +$0.13 Actual Revenue: $2.70 Bil Revenue Estimate: $2.65 Bil Revenue Surprise: +1.9%, +$49.11 Mil
December 20, 2012 – 5:12 pmResearch in Motion reports Q3 adjusted EPS (22c), consensus (35c) Reports Q3 revenue $2.7B, consensus $2.66B.
December 20, 2012 – 5:14 pmActually doesn’t seem too bad
December 20, 2012 – 5:14 pmGod bad or bad bad?
December 20, 2012 – 5:14 pmThat’s Good
December 20, 2012 – 5:14 pmeps and revenue seems to beat est.
December 20, 2012 – 5:15 pmYep. Would guess Stock will bounce on this news.
December 20, 2012 – 5:15 pmGuess we beat on the wrong side of that one too
December 20, 2012 – 5:15 pmUnless they delay the launch or something like that.
December 20, 2012 – 5:16 pmYahoo” “Looks like a solid beat.” Damn.http://www.businessinsider.com/rim-earnings-2012-12
December 20, 2012 – 5:19 pmAre you RIMM shorts buy immediately when the halt expires or waiting for it to dip back down?
December 20, 2012 – 5:20 pmtrying to decide how best to get out of my RIMM short.
December 20, 2012 – 5:21 pmGiven how things work it could still go down.
December 20, 2012 – 5:22 pmIf it was Apple it would get crushed, just because it is Apple
December 20, 2012 – 5:23 pm@Rhykor: I like that. ER numbers may not matter sometimes. But let’s see..
CodyDecember 20, 2012 – 5:25 pmI don’t know how RIMM will open, but here’s the key text that will catalyze the trading tomorrow: “The Company expects that there will be continued pressure on operating results as it gets set to launch its BlackBerry 10 platform in the fourth quarter. The Company intends to continue to consider using pricing initiatives on BlackBerry 7 devices and service fees in some markets as a way to maintain our subscriber base and drive more BlackBerry users. The timing of the BlackBerry 10 launch event for January 30, 2013 could also impact sales of current BlackBerry 7 products as some customers may defer purchasing decisions and wait for BlackBerry 10 devices. All these factors are expected to impact unit volumes, subscribers, margins and service fees. In addition, the company will be significantly increasing its marketing spending this quarter as expected, to support the global launch of BlackBerry 10, and the Company expects to report an operating loss for the fourth quarter.”
December 20, 2012 – 5:26 pmWow — talk about quizzical.
December 20, 2012 – 5:26 pmRIM FY Q3 adjusted net loss 22 cents a share
December 20, 2012 – 5:26 pmCody — still with your “I’m holding it only Friday and or maybe Monday no matter what” stance?
December 20, 2012 – 5:27 pmCould anything in tomorrow’s movement change your plans?
December 20, 2012 – 5:29 pmAlso from year ago period (might not matter if folks want to just trade this up based on analysts targets)…Revenue was $2.73 billion, down from $5.17 billion.
CodyDecember 20, 2012 – 5:30 pm@deadaphids: A trade is a trade is a trade. I think that guidance there is pretty horrible, but the market is the arbiter of the trade outcome. Regardless, I’ll stick to my plan of exiting in the next couple trading days or so.
December 20, 2012 – 5:30 pm@Cody: What do you think will happen to Apple’s share price tomorrow?
CodyDecember 20, 2012 – 5:31 pm@filipo Total coin toss.
December 20, 2012 – 5:31 pmIf I lose 100% on RIMM, so be it
December 20, 2012 – 5:31 pmi think RIMM has too much momentum to go down on a bad ER…wish AAPL had that
December 20, 2012 – 5:32 pmThanks for the quick answer and honesty, Cody. Note that: In the release, RIM says its CIO is going to retire. More good/bad news, I’d say.
December 20, 2012 – 5:33 pmCody: did you ever catch any of those March puts? Or are you “just’ short?
CodyDecember 20, 2012 – 5:34 pmI got filled on some of the march puts when the stock rallied that hard into the close. So yeah.
December 20, 2012 – 5:36 pmShort Sellers Lurk Underneath RIMM’s Stock Surge
December 20, 2012 – 5:36 pmmusa: duh
December 20, 2012 – 5:37 pmThis really seems like a total gamble and given some of the other gambles I’ve done on earnings I’d say that this could either way and that the AH and PM are not indicative of what happens tomorrow.
CodyDecember 20, 2012 – 5:37 pm@Rhykor: Yes, this is a gamble, not an investment. Earnings trade gamble is usually how I term these occasional trades in my write-ups.
December 20, 2012 – 5:39 pmHmmm… 4:40. Scottrade is at 0.00/0.00
December 20, 2012 – 5:39 pmShorting RIMM makes sense after 130% run
December 20, 2012 – 5:39 pmCody, on AAPL. You think it’s pretty dead money until earnings?
December 20, 2012 – 5:39 pmAm i wrong in thinking that if much of the upsurge till now was/is shorts covering, that once that atypical stuff is out of the way, more rational, “Pure” trading behavior (if there is such a thing ) — namely, agreeably weak guidance — will take hold and it will drift back down again?
December 20, 2012 – 5:40 pmAnother washout
December 20, 2012 – 5:40 pmThat looks awfully weak for such a “beat” now that it has resumed trading.
CodyDecember 20, 2012 – 5:43 pmWell crap. It’s up after hours here. That said, deadaphid is right that many times the action immediately after the release reverses the next day. Sometimes during the conference call even. But we won’t know til tomorrow for sure how it’ll actually trade out.
Cody back here in real-time now. The stock’s down today big time, as the conference call commentary did indeed end up freaking out the longs and emboldening the shorts. RIMM’s stock is, would you believe, nearly 25% from where the highs it traded at after hours yesterday. It was at $15.60 at one point before the call started after the filing came out. Now it’s about $12.
I think RIMM is, as I’ve said for a long time, still doomed. I’m covering my common stock short and I’ll start scaling out of some of these puts that are up big since I got filled on them yesterday. With current estimates now at a less of $1.50 a share next year and with no profit path in sight, this stock’s got very little support now. It might rally into the BB10 launch next month and if it does, I’m definitely going to look at re-shorting officially. I’ll probably sell down more than half my puts today and over the next couple days or so and let the rest ride.