Bad moon on the rise for RIMM

It seems appropriate CCR should be the house band for Research in Motion (RIMM, quote). There is “a bad moon on the rise” for the Canadian smart phone company that threatens to eclipse all its operations.

At first, it did not seem that it could get any worse for RIMM than the poor reports in the press about the Blackberry 10, its new smart phone Operating System that was supposed to rival the iPhone 5 from Apple, Google Android (GOOGquote) products from Samsung (SSNLF, quote) and Microsoft’s (MSFT, quote) new Windows Phones. 

This not the type of competition against which comebacks are easily mounted. For that type of rebound, RIMM can never seriously err in order to gain traction and impress the investor community with its new smart phones.

Never say never.

It has gotten worse for RIMM: much, much worse. In the words of one analyst, the company is facing “disaster.”

Disaster is the name of the long awaited Blackberry 10. 

The company recently announced the introduction of Blackberry 10 would be delayed. In addition, massive layoffs were also announced. As a result, RIMM’s share price has fallen 17.78%. Year to date, RIMM is down 48.34%. This inevitable decline for RIMM was reported back when the stock could still jump on good news.

It does not look like there is much good news ahead for either the shareholders or employees of RIMM. It has been trying to sell itself since last year — there have been no buyers. There will be even less interest with the Blackberry 10 not coming out and the iPhone 5 hitting the market soon. Investors now prefer to wait for a company to go into Chapter 11 and then move on the prime assets as values generally decline. That certainly seems to be the story for RIMM and its long suffering shareholders.

It has been a very pleasant summer however, for those holding a short position on RIMM. At present, the short float is now 15.56%. A short float of 5% is considered to troubling for a company. For the last 52 weeks of market action, Research in Motion has fallen by 74.11%. 

Except for those short, the future does not appear to be very profitable for those with a position on RIMM. On a quarterly basis, sales growth has fallen by 42.67%. For the same period, earnings-per-share growth is down by 174.58%. Earnings-per-share growth this year is off by 64.95%.

There is still some support for the company: RIMM was upgraded by JMP Securities on May 30. Since that upgrade, the stock price has fallen by more than 30%. With the Blackberry 10 debacle, it would seem RIMM’s share price is headed in only one direction.