Research in Motion is the Headless Horseman

Research in Motion

used to be known as one of the "four horsemen" of technology, along with Apple

, Google

and Amazon

. Not anymore. The Ontario-based company reported second quarter earnings of 80 cents per share on $4.17 billion in revenues. Wall Street had been expecting earnings of 87 cents per share on $4.47 billion in revenues. What is even worse is the technology company provided guidance for the third quarter that is well below the already lowered expectations. Research in Motion now expects earnings of $1.20 to $1.40 per share on $5.3 to $5.6 billion in revenues. Wall Street expects third quarter earnings of $1.36 per share on $5.27 billion in revenues. Despite the continued financial worries at the company, the company was optimistic in its press release, and showed no signs of worry during the conference call. "We successfully launched a range of BlackBerry 7 smartphones around the world during the latter part of the second quarter and we are seeing strong sell-through and customer interest for these new products. Overall unit shipments in the quarter were slightly below our forecast due to lower than expected demand for older models," said Jim Balsillie, Co-CEO at Research In Motion in the press release. "We will continue to build on the success of the BlackBerry 7 launch to drive the business as we focus our development efforts on delivering the next generation, QNX-based mobile platform next year." The company appears to be delusional at the top, with Balsillie and Co-CEO Mike Lazaridis refusing to see anything wrong with the company. It went so far last night during the conference call that they closed the conference call early with a few minutes to go, and left virtually no time for questions. Balsillie and Lazaridis own a large percent of the company, and as long as they do, there does not appear anything can be done. The times have passed Research in Motion by, and the company is standing still. Before the earnings report yesterday, Goldman Sachs put out an a trade idea,

before the company's earnings. Analyst Simona Jankowski suggested buying the September $29/24 put spread for $1.32, as she saw the potential for 26% downside. She is not far off, as shares are getting beaten up this morning, down nearly 20%. If Goldman is suggesting buying put spreads on the company and expecting that much downside, there is obviously something structurally wrong at the company. Both

and

commented on the report, and neither bank was positive. In fact, very few were positive this morning. How could you be, with a management team that is clearly delusional and in denial? There are plenty of value reasons why Research in Motion would be a buy this morning, especially with the 20% haircut. The company is still very profitable, and there is hope that the QNX Blackberry's will be vastly superior to the phones already out there. The company is trading at absurd valuations, lower than five times projected 2012 earnings. Yet it does not matter. As long as Balsillie and Lazaridis are at the top of the ship and they do not see anything wrong with the company, then it is dead in the water. There could be a white knight, like a Microsoft

or somebody that takes over Research in Motion, but at $16 billion, that is a large sum of money that not many companies can afford. With the current product line and management team, they may not want to either. They say a captain goes down with his ship, good or bad. This time, everyone can see the ship sinking from miles away, except its captains. A headless horseman, indeed.

Traders who believe that Research in Motion will finally get it with its QNX operating system might want to consider the following trades:

Traders who believe that RIM is finished may consider alternate positions: