RIMM: Breakdowns, Rumors, and Valuation ($RIMM)

The S&P Has Ripped Higher
Confidence in the eurozone "solutions" has led to euro strength vis-a-vis the US dollar, and the result has been a furious S&P 500 rally. Technology has led the charge, particularly in anticipation of Apple's earnings tonight. Earnings have done their thing, i.e. outperforming by a little, with cautious outlooks. It wouldn't take a crystal ball to predict this, as long as you believe that eurozone governments will attempt to kick the can, and hard, down the road.

RIMM Is Getting Hit on All Sides
The news for RIMM couldn't really get much worse, for now. First, Apple's 4S seems to be an enormous success, with 4 million units sold over its opening weekend. Second, Blackberry service has been interrupted, which prompted management to both apologize publicly, and offer $100 of free applications to users as compensation. Third, Carl Icahn stated on CNBC that RIMM was "not on the radar," thereby defusing buyout hopes.

That Said, $RIMM Has Been Resilient
What is most interesting is that $RIMM the stock has not really gone down very much. Now, there can be no doubt that much of this is due to the fact that the market, as a whole, has rallied more than 10% from the intraday lows earlier this month. At this point, the resilience must be respected, since it is clear that long-term holders have not entirely thrown in the towel. That said, the fundamentals of the above paragraph continue to apply, and note that $RIMM was very careful to not offer cash, and the reason is simple: it is running out of cash, as evidenced by last quarter's earnings report.

Breakup Evaluation
Again, the ltz vortex repeats its long-term view: single digits are in order as a terminal stock price. Cash is now down to $1.5/share. Patent portfolio? Again, Apple views its main competition as Samsung, as the two are in a bitter, and growing, battle in pretty much every jurisdiction on the planet. Apple and Samsung are fighting each other simply because $RIMM is not a relevant competitor. The Blackberry system outage has damaged its last remaining asset: diehards have stuck with Blackberry due to network security and exclusivity. Those features, along with RIMM's existence itself, must now be questioned. So unless a technology buyer appears to fuse the patent portfolio with one of its own, there is almost no chance of a bid. Time is running out, and management either needs to be replaced, or a further decline will be in order.