Barron’s Calls Research in Motion Their Worst Pick of the Year

Jun 19, 2011
J. Webster
Comments Off on Barron’s Calls Research in Motion Their Worst Pick of the Year

In an article titled, “The Blackberry Strikes Back“, written in April of this year, Barron’s said RIMM has the smarts and the products to battle Apple for years to come. And they largely sited the potential for overseas expansion as a reason to own the stock. They also sited RIMM’s security system as a company strength that’s not given enough credit.

Although they were right in saying there wouldn’t be any lines for the PlayBook tablet, they were completely wrong on the stock. The stock was hovering around $54 when they made the recommendation. RIMM has now been cut in half, trading for $27. They are now coming clean, admitting their mistake, taking the blame, to an extent, let’s say.

Now who does Barron’sthey blame? Well, the CEO’s of Research in Motion of course. Why would they think of blaming their own research and analysis:

“Our biggest mistake was to put too much faith in RIM’s co-CEOs, Mike Lazaridis and Jim Balsillie, whom we’d long admired. They’ve not only disappointed us; they’ve done worse than some bears expected,” the paper wrote.

To me, blaming the CEOs seems like an easy way out for Barron’s. Admit it, you messed up. Sure, the CEO’s run the company but the writing was on the walls what with Apple taking more and more market share. RIMM was a stock in trouble.

What’s more, Barron’s is essentially saying to bail out on the stock right now. To me, this seems like a decision made in a panic.

“The company’s best hope now is a takeover, but there’s no suitor in sight,” according to the paper. “Cheap as the stock has become, the only choice is to sell.”

What’s the best advice here? Maybe don’t listen to Barron’s stock picks.

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