Markets Continue to Pound RIM, How Low Can Stock Go? (RIMM)

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Shares of BlackBerry-maker Research in Motion
RIMM
slid another 1.8% Friday, closing just below $46. As the company's stock continues to plummet from June highs of $62, the question on investor minds remains: how low can it go? Research in Motion has been bogged down as it actively works to solve BlackBerry issues raised by overseas nations, including the United Arab Emirates and India. Both the UAE and India have requested the ability to actively monitor BlackBerry communications, citing national security concerns. Research in Motion faces an August 31 deadline to give Indian government authorities the ability to read email and instant messages sent over the BlackBerry. If leaders aren't satisfied, BlackBerry e-mail and messaging services could be cut. On top of that turmoil, reviews of BlackBerry's newest model, the Torch, have been mediocre. According to a Reuters report, "RIM launched the Torch amid unusual fanfare this month as it sought to reinvigorate its image with consumers amid a shrinking divide between devices for business and pleasure. But the high-profile launch failed to drum up even a hint of the excitement generated by Apple
AAPL
launches and no one lined up for hours at a flagship store -- RIM doesn't even have one." Iain Grant, the head of telecom consultancy SeaBoard Group, explained the situation: "Apple and [Google's
GOOG
] Android have changed the world RIM created. But they're actually expanding the universe more than they are cannibalizing it." Investors don't appear to be pleased with the company's recent efforts. 52-week lows continue to be hit, and bulls have been few and far between. Still, RIM can be assured of a prominent position in a variety of different markets - from teenaged texters to security-conscious professionals. "I talk to the most risk-averse type of users, like defense contractors, and they would not even consider going outside of RIM," Wunderlich Securities analyst Matthew Robison told Reuters. Optimists will point toward BlackBerry's tremendously strong global market presence, and a highly visible effort to compete with Apple's iPhone in its newly released Torch touchscreen. Bears, however, point toward potential lost business. BlackBerry customers pay a premium for the privilege of encrypted security, and some may be turned off by a company that succumbs to foreign demands. How long the stock can remain below $50 remains to be seen. Investors should be careful before considering a purchase of the volatile stock, especially without resolution of its security issues.
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Posted In: NewsGlobalIntraday UpdateMarketsMoversReuters
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