RIMM: Research In Motion Dusts Me

Research In Motion (RIMM) Reported First Quarter Results. Revenue for the first quarter of fiscal 2008 was $1.082 billion, while GAAP net income for the quarter was $223.2 million, or $1.17 per share diluted. Both numbers were well outside the high end of the guidance range the company provided last quarter, and I feel like a chump for hanging onto my puts.

Given that the deals still abound, the iPhone debuts today and the puts are nearly worthless anyway I will continue to hold onto them, though without much hope of them expiring in the money.

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4 Comments on “RIMM: Research In Motion Dusts Me”

  1. Yesterday, I came across an article in the WSJ with a surprising conclusion: AAPL may be overvalued!

    To reach this conclusion, they compare AAPL’s handset business with Nokia’s (NOK):

    Since the iPhone was unveiled on January 9th this year, shares of AAPL went up from $85 to over $120. This has increased AAPL market cap in $34 billion. That means investors are valuing the iPhone business in $34 billion. That’s a lot of iPhones! But AAPL is expecting to sell only 10 million iPhones by the end of 2008.

    Compare this to Nokia (NOK), who is expected to sell 550 million phones in the same period, and has a $108 billion market cap.

    So NOK sells 55 phones for every iPhone. Yet its market cap is only worth 3 times as AAPL’s iPhone business. This doesn’t make sense in my book.

    So what do you think? Should we short APPL and bet against Steve Jobs? (I never thought I would say that!)

    http://www.manuelbackus.com/2007/06/wanna_bet_against_steve_jobs_a.html

  2. Josh

    RIMM puts – I had sold some July 135 puts (naked) a few months ago. The day before the earnings I bought them back fearing that expectations might be too high. I made a little bit of money, but I too was shocked at the blowout quarter.

    A significant portion of Nokia phone sales are on the low end in Emerging Markets and will not be nearly as profitable as the IPhone.

  3. Josh

    I am a seller of AAPL puts (naked)

  4. Trent

    One thing you can say for RIMM and AAPL – they aren’t boring to watch.

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