The Real Reason RIM Rallied

On Wednesday, Research In Motion (Nasdaq: RIMM  ) shareholders got a rare and welcome reprieve from the typical onslaught of bad news of late.

The stock had jumped higher to the tune of 13% on more than three times the average daily volume before closing out the day with a healthy 10% gain. While initial reports suggested that the catalyst of the surge tied back to speculation that the BlackBerry maker may be put out of its misery and acquired by the likes of tech heavyweights -- either Amazon.com (Nasdaq: AMZN  ) or Microsoft (Nasdaq: MSFT  ) and Nokia (NYSE: NOK  ) jointly -- that conjecture overshadowed the real reason behind the move.

To unearth the real cause, you had to dig beneath those speculative acquisition headlines to find something based on undeniable fact. Something not spawned by dubious guessing games and questionable rumors. Something that is attributed to incontrovertible truth instead of "people familiar with the matter." Something ... with a slingshot.

Angry Birds.

At long last, after investors' seven long months of anxiously waiting with bated breath, RIM has delivered. The notoriously popular and addictive avian adventure to slay swine and rescue their offspring has now made its way to the PlayBook, fulfilling a promise personally made by co-CEO and co-Chairman Mike Laziridis. Investors rejoiced that the darkest days are over and welcome a signal that RIM's app platform has reached a maturity milestone long enjoyed by Apple (Nasdaq: AAPL  ) iOS and Google (Nasdaq: GOOG  ) Android: quadriplegic fowl.

Presumably, the company had focused its resources toward strengthening its relationship with developer Rovio to help accelerate the game's arrival, while delaying other secondary functionalities such as native email and calendar apps. Also on the back burner are Android support and the delayed BlackBerry 10 operating system that will run all future BlackBerrys.

As the saying goes, "The darkest hour is just before the dawn." Research In Motion's darkest hour has been the last few quarters, and its dawn is pulverizing green pigs with an arsenal of multitalented, multicolored birds with a taste for vengeance.

Want to make sure you stay updated with the latest news and analysis and see when the PlayBook finally gets native email and calendar apps? Use our free Watchlist feature to always stay up to speed on the latest developments.

Fool contributor Evan Niu owns shares of Amazon.com and Apple, but he holds no other position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Apple, Microsoft, Google, and Amazon.com. Motley Fool newsletter services have recommended buying shares of Google, Apple, Amazon.com, and Microsoft and creating bull call spread positions in Microsoft and Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (7) | Recommend This Article (8)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 23, 2011, at 7:53 PM, kabster wrote:

    And this is exactly the reason I do my own research and DO NOT listen to the talking heads and the MSM. Yahoo just today had a bashing story about RIMs inevitable failure. Some people would rather have a RIM device. And some people would rather waste money on the new in thing. I'm looking @ u Apple.

  • Report this Comment On December 23, 2011, at 8:16 PM, tkell31 wrote:

    Congrats Kabster, up until this very moment I had never met or hear of anyone who preferred a blackberry over an Apple product. Considering our whole company is issued blackberry's I'm guessing my sample size is about 250 people. As an aside I guess our complaining must have worked, we're ditching the crapberry and going with Apple

  • Report this Comment On December 24, 2011, at 10:21 AM, crazyoldguy wrote:

    Rimm Subscribers went from 70 to 75 million last quarter? Little debt? P/E 3? Is this info correct? If you think or know its that bad as comments suggest you are obviously short. Yes i am long took a small position and if rim is going out of business next month? summer? Does it have ANY value as a takeover or sold an broken up?

  • Report this Comment On December 24, 2011, at 4:14 PM, dxtx wrote:

    InfoThatHelp is off his meds for sure. Always bashing RIM since he is probably a short. Reminds me of James* also found bashing RIM.

    I have a Playbook and it is a great device for me, and if QNX on the Playbook is an indication of future RIM phones, then they will be great user friendly phones.

    Previously I bought an Ipad2 and was so underwhelmed that I took it back within two days.

  • Report this Comment On December 25, 2011, at 8:38 AM, crazyoldguy wrote:

    Merry Christmas Info All i know that with my limited knowledge base is if you short now $14.00 has a profit limit to 0 shorting here seems a little risky no one has a crystal ball just seems to me in the near term, say a couple of weeks the risk reward for the shorts is just to great. I dont want to get into personal barbs about each other just want to learn did ok the last two weeks day trading. One thing i have learned is there is a lot of stocks to trade dont have to hang your hat on any one of them just watch news and price and volumne over reaction either way and a little money can be made i have a small position long on rimm.

  • Report this Comment On December 26, 2011, at 9:28 AM, dxtx wrote:

    InfoThatHelp, you are either illegally trading on insider information or making up stories.

  • Report this Comment On December 28, 2011, at 11:18 AM, crazyoldguy wrote:

    sold rimm yesterday for 8% gain 4 days

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