“The Street” Rethinks RIM

Who is “The Street” and why did they think RIM (now officially called Blackberry) was going to do well in Q1?  Obviously  the Street  refers to Wall Street and it seems to be a term used to allow Wall Street analysts to avoid accountability.

The StreetThese highly compensated analysts are supposed to be providing guidance to help investors make money (I assume).  But just like the less than helpful analysts that are part of the Apple fan club who thought AAPL would go past $1100/share (now trading at under $450/share) the Blackberry watchers are also observing reality unfold in the opposite direction of their recent predictions.

As reported by Zack Epstein of BGR last week: Canaccord Genuity analyst T. Michael Walkley had initially called for BlackBerry to sell about 1.75 million BlackBerry Z10 smartphones in the February quarter. But after his checks following the phone’s launch in the UK and Canada found limited initial supply and softer than expected demand, the analyst slashed his estimates for the current quarter from 1.75 million units to just 300,000.

That’s right, from 1,750,000 down to 300,000. Just a small downgrade…  of 583%.  How can someone paid to be a technology investment analyst be off by a factor of six?  What about all the poor saps that loaded up on Blackberry stock when the forecast was 1.75 million?  Oops, sorry about that.  It brings to mind watching the weather forecast call for sunny skies and you look out the window and it’s raining. You take another look at the forecast and now it calls for rain.  Eyewitness weather.

I love this comment from Pacific Crest analyst James Faucette: “We believe the Street has gotten ahead of the potential reality for BB10 shipments…”.  Really?

Don’t these guys read iGeekTalk?  Obviously they should; their followers would be a lot richer now if they did.  If I might be so bold as to point out my prognostications going back as far as 2011

Jul 3, 2011:  “For RIM, it appears they can’t [turn the company around], so its only a matter of time.”

Jul 7, 2011: “What we see here is the continuing death spiral of RIM.”

Jan 23, 2012:  An entire article about the death of RIM.

Nov 22, 2012:  Not too subtle sarcasm about a “financial analyst who “… believe[ed] BlackBerry 10 sales performance next year [2013] will be even more impressive than he initially thought, and he upped his fiscal 2014 shipment estimates”.

Jan 1, 2013:  “The only question for [RIM] in 2013 is, will there be a 2014?”

I can’t say if he is one of my readers (professional courtesy) , but there is one big investor who wasn’t drinking the analyst’s BB10 Cool-Aid last quarter.  Jim Balsillie, RIM’s co-founder and ex-co-CEO held a 5.1% stake in RIM a year ago.  Last week he declared in an SEC filing that at the end of December his stake was zero.

So now that  the Street  has caught up to Apple AND Blackberry reality, I’m waiting anxiously for their next investment tip… probably a downgrade of WorldCom to Hold.


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