Dec 21, 2011

RIMM Finds Some Love at $12

December 21, 2011

Continuing the on-again off-again return pattern, equity markets are down today on the back of Oracle (ORCL) missing numbers last night. Markets rocked yesterday after US housing construction starts jumped 9.3% in November, driven by strong multifamily unit starts. Additionally, the Labor Department reported that unemployment dropped in 43 states last month.

Research in Motion (RIMM), chart below), is finally getting some love today after rumors have swirled about possible takeovers by Microsoft (MSFT), Nokia (NOK), and/or Amazon (AMZN). The company has been struggling with share losses, and last week missed earnings and pushed out the launch of their new generation of phones until late 2012.

As I mentioned Monday, the Senate passed a two-month extension of the payroll tax cut and unemployment benefits, then left for vacation. The House had already passed a one-year extension, which the Senate refused to vote on. Now the House is refusing to vote on the two-month extension, calling it inadequate and kicking the can down the road. Paraphrasing Benjamin Franklin, we need a revolution every 200 years. I’d say we’re a bit behind schedule.

Moody’s has issued a warning about Britain’s credit rating, now triple-A. Although the summer downgrade of the US proved to be erroneous in the short run (treasuries have rallied since the downgrade), the downgrade of Britain will be based more on fundamentals than the US downgrade. Concerns about the ability to service the mounting public debt and sluggish growth are driving Moody’s decision process.

Christine Lagarde, head of the IMF, has warned that developed nations should prepare for a European recession by building up foreign exchange reserves.

President Obama has been receiving a bit of heat for his vacation plans. It seems that inflation is rampant in Hawaii as he is spending $4 million on his holiday trip to Hawaii, quite a bit more than last year’s $1.5 million.

DigiTimes is reporting that Apple (AAPL) will be launching a 7.9” iPad in late 2012, as well as a new iPad (iPad 3 or iPad 2A?) in the first quarter.

Nike (NKE) beat numbers last night on strong branded apparel sales and strength across all geographies except Japan. The company has a deal starting in April with the NFL that should help sustain growth in the back half of calendar 2012. NKE did suffer a 260bps decline in gross margins due to higher product costs.

AAPL won a court decision with the ITC regarding their patent suit against HTC and the Android operating system. The ruling didn’t go as far as AAPL wanted, which was to block the sale of HTC phones in the US. HTC must remove the offending functions, which allow users to “tap and go” to various functions. As an example, in unstructured data such as an email, the functionality would allow you to tap on a phone number for direct dialing.

AT&T (T) has decided to bow out of the T-Mobile merger due to pressure from the Justice Department. The deal, which would have merged the #2 and #4 wireless carriers, is good for Sprint (S) and Verizon (VZ) because it limits both companies’ ability to compete with new 4G technologies. Both companies are spectrum constrained, making it difficult to compete with Verizon.

Barry Bonds was convicted of giving misleading testimony to a federal grand jury and received two years of probation and 30 days of home confinement. Based upon the pictures below, I don’t see how people could even consider he might have used steroids.

Have a great day


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