Did You Sell Research In Motion (RIMM) Short In 2010?

Selling a stock you do not own creates a 'short' position, allowing you to profit if the price falls. Since stocks sway up and down, some more than others, shorting can result in some handsome gains if your timing (entry & exit) are managed correctly. Yet attempting to short any stock is a Dangerous proposition as it exposes our portfolio to Unlimited Losses

POTC identified a very high-profile tech stock was in trouble back in 2010 before its fall began, it was Research in Motion (RIMM) known as BlackBerry (BBRY) today. 

BBRY is trading at $10.89 and appears to have reached some point of stability. We have No Opinions on individual stocks for readers of the blog anymore, we are strictly an educational spot for interested minds to visit. 

 


RIMM was a perfect example of analysts "falling in love" with a heavyweight type of stock, the 5th Commandment teaches us to never behave that way. Then we witnessed their frustrations as they raised price targets after RIMM missed the quarter. The 6th Commandment states,"never accept excuses from management", except for Goldman's Ms. Simona Jankowski, most of the analysts stayed bullish on RIMM

POTC predicts the stock begins closing below $70 shortly, and June expiration is many weeks away; hold the RIMM Puts and enjoy the technical control as share price erodes under the all important 200 day line. We are very satisfied shares broke our way, realizing the last 8 Wall Street firms either Upgraded or Initiated coverage with Buy ratings in the past several weeks: 
Mar 26, '10 JP Morgan Upgraded to Overweight 
Mar 25, '10 Rodman & Renshaw Initiated Mkt Perform 
Mar 19, '10 Wunderlich Initiated Buy 
Mar  8, '10 BMO Capital Markets Upgraded to Outperform 
Feb 23, '10 Stifel Nicolaus Initiated Buy 
Feb 12, '10, RBC Capital Mkts Upgraded to Outperform Top Pick 
Feb 12, '10 Wedbush Morgan Initiated Outperform 
Feb 1, '10 Standpoint Research Upgraded to Buy

*DJ (Dow Jones) Research In Motion Cut To Sell From Neutral By Goldman Sachs (GS

Research In Motion Ltd. (RIMM, RIM.T) was cut to sell from neutral by Goldman's Ms. Jankowski cut her price target from $73 to $65:
"its products will increasingly lose differentiation as the focus shifts from email, where RIM leads all competitors, to applications, where RIM lags both the iPhone from Apple Inc. (AAPL) and Android, an operating system of Google Inc. (GOOG). With its North American business already in decline, the broker doesn't expect international strength to be enough of an offset." 
-By Steve Goldstein, 415-439-6400; AskNewswires@dowjones.com 

In closing, a high short-interest in any stock must be treated with caution as our 1st paragraph explained. 

Short sellers are never perfect and have been proven wrong from time to time. Whitney Tilson's Netflix (NFLX) short and Bill Ackman's Herbalife (HLF) are 2 high-profile examples of how individual investors with limited capital could destroy their aggressive portfolios by attempting to sell short.
 

Disclosure: None.

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