RIM Thrust into High Stakes Game of Beat the Clock

After RIM’s latest earnings report, Shaw Wu of Stern Agee tells us, the clock has started for RIM. They now have a limited amount of time for their fortunes to turn.

He comments come after the beleaguered BlackBerry maker reported a much bigger quarterly loss than expected Thursday and delivered revenue that fell short of Wall Street's expectations.

“This company is now losing money," he says. RIM reported its first quarterly operating loss in more than seven years. "Proponents of the stock were hanging their hats on the fact that they were still profitable. Now they're not. And it’s likely they’re looking at big losses going forward.”

Wu says RIM now has a limited amount of time before the money runs out.

“We estimate at the current run rate, RIM has two years. But if they’re not careful cutting expenses it could be less.”

Sounds bleak. And that's exactly the time a nimble trader may be tempted to buy, especially with the stock trading $7.75 in extended trade. After all, RIM is potentially a takeout target.

However, the Fast Money pros recommend resisting temptation, that is, unless you’re prepared to lose your shirt.

“Last time we did sum of the parts analysis we got $9,” says Wu, “but when you x-out the cash – it’s $4 - $5. If anything there’s still downside risk.”

Looking at the earnings a little more closely, RIM posted a net loss of $518 million, or 99 cents a share, in the quarter ended June 2. That compares to net earnings of $695 million, or $1.33 a share, in the same period a year earlier.

On an operating basis, RIM lost 37 cents a share.

Analysts were projecting a loss of 3 cents a share, according to a Thomson Reuters poll.

* You can find our conversation with Shaw Wu about 7 minutes into this post.

Posted by CNBC's Lee Brodie

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Trader disclosure: On June 28, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders;
Brian Kelly is long SPY CALLS; Brian Kelly is long QQQ CALLS; Brian Kelly is short YEN; Brian Kelly is short POUND; Joe Terranova is long VRTS; Joe Terranova is long MCD; Joe Terranova is long PNC; Joe Terranova is long USB; Joe Terranova is long TCBI; Joe Terranova is long SBUX; Joe Terranova is long UPL; Joe Terranova is long PXD; Joe Terranova is long WFM; Joe Terranova is long NXPI; Joe Terranova is long HYG; Joe Terranova is long AAPL; Joe Terranova is long EMC; Joe Terranova is long LPX; Joe Terranova is long OIH JULY $34 CALLS; Karen Finerman is long AAPL; Karen Finerman is long BAC; Karen Finerman is long JPM; Karen Finerman is long WMT; Karen Finerman is long TGT; Karen Finerman is long RIMM; Karen Finerman is long M; Karen Finerman is short SPY; Karen Finerman is short IWM; Karen Finerman is short MDY; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Scott Nations is long SPY; Scott Nations is long C; Scott Nations is long BAC; Scott Nations is long JPM

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