RIM Shares Rebound After Post-Earnings Crash
Research In Motion Ltd. (RIM), the beleaguered maker of the BlackBerry smartphone, gained 11 percent today, rebounding from a post-earnings crash that erased a quarter of the company’s market value.
The shares rose to $11.83 at the close in New York, marking the biggest one-day increase since Nov. 23. RIM’s stock has fallen 18 percent this year.
While RIM reported a smaller quarterly loss than projected last week, the company raised concerns about declining service fees. Chief Executive Officer Thorsten Heins said that lower-end users will generate “less or no service revenue” in the future, a move that affects RIM’s most profitable source of revenue. The shares tumbled 23 percent the day after the remarks and an additional 2.7 percent the following trading day.
Investors may have overestimated the impact of the change on earnings per share, Kevin Smithen, an analyst at Macquarie Securities USA Inc. in New York, said today.
“We believe that CEO Heins’ comments on changes to services plans were taken out of context and the EPS impact from those changes is not as great as the Street is fearing,” he said in an e-mail. “The stock was largely oversold post- earnings report.”
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