Strategic Review No Reason to Buy RIM: Pros
“Too much ails RIM ,” says Fast Money trader Joe Terranova. And despite reports that RIM hired JPMorgan and RBC to review strategic alternatives, Terranova says stay away.
RIM also said there would be significant in some areas, confirming recent reports of job cuts.
“Typically this kind of news sends share higher,” adds trader Tim Seymour. But not this time. Shares tanked in the after market, sliding well over 10%. “I think the market is once bitten and twice shy,” he says.
Seymour is referring to forecasts, also released after the bell, in which RIM warned it may report its second consecutive quarterly operating loss.
“In our opinion the company should be broken into two parts,” says activist investor and RIM shareholder Vic Abolini on CNBC’s Fast Money. “It should break into a hand set business and a software and surfaces business.”
But even if they were to do that, Jefferies analyst Peter Misek isn’t sure the company would attract buyers.
Although he thinks Amazon and Facebookmight be interested, he adds “they would be catching a falling knife – they may be better off, just starting from scratch.”
Misek also says that although the company’s assets have value, if they continue to lose money at this rate, “they can drown out value from patents or infrastructure.” Therefore, he tells us it’s quite difficult for the stock to put in a floor.
Trader Tim Seymour believes RIM's brand generates value from a marketing perspective.
“Asia has been buying brand recognition. I can see a China-based cellular operator being interested – it’s an interesting idea,” he say, “but it’s only an idea.”
But all this aside, there are just better places to put money, says Terranova. Move on.
What do you think? We want to know!
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Posted by CNBC's Lee Brodie
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Trader disclosure: On May 29, 2012 , the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Joe Terranova is long VRTS; Joe Terranova is long MCD; Joe Terranova is long PNC; Joe Terranova is long SBUX; Joe Terranova is long SJM; Joe Terranova is long UPL; Joe Terranova is long WFM; Joe Terranova is long AAPL; Joe Terranova is long NXPI; Joe Terranova is long LPX; Joe Terranova is long SNDK; Joe Terranova is long CNX; Joe Terranova is long LQD; Karen Finerman is long AAPL; Karen Finerman is long BAC; Karen Finerman is long JPM; Karen Finerman is long NFLX PUT SPREAD; Karen Finerman is long WMT; Karen Finerman is long TGT; Karen Finerman is long RIMM CALLS; Karen Finerman is long HPQ; Karen Finerman is long DGIT; Karen Finerman is short MDY; Karen Finerman is short IWM; Karen Finerman is short SPY; Tim Seymour is long AAPL; Tim Seymour is long BAC; Tim Seymour is long INTC; Brian Kelly is long AAPL; Brian Kelly is long WFC; Brian Kelly is long GLD; Brian Kelly is long XLU; Brian Kelly is long INTC; Brian Kelly is long PEP; Brian Kelly is long USG; Brian Kelly is long XHB; Brian Kelly is long USD; Brian Kelly is long CHF; Brian Kelly is short Swiss Franc; Stephen Weiss is short JCP; Jon Najarian is long AAPL CALL SPREADS; Jon Najarian is long BAC CALL SPREADS; Jon Najarian is long GS CALL SPREADS; Jon Najarian is long INTC CALL SPREADS; Jon Najarian is long IBM CALL SPREADS; Jon Najarian is long CIEN CALL SPREADS; Jon Najarian is long LM CALL SPREADS; Jon Najarian is long DDMG;Jon Najarian is long CIGX; Jon Najarian is long CBOE; Jon Najarian is long CME
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