Is Research in Motion Worth Another Look

While a lot of analysts were touting Research in Motion

all the way down from $100/share to its 20s, Goldman Sachs

added Research in Motion to its 'sell list' in April 2010 while it was still in its 70s. However, while everybody just hates RIMM these days, Goldman Sachs

. It's no secret that Research in Motion is losing market share badly to Apple's iPhone

and Google's Android

, and no one seems to have any idea how it can turn the situation around. Its foray into tablets was equally disastrous, and analysts ponders when it will do what HP

did, i.e, accepting defeat and pulling it out of the market. Indeed, it is very difficult to find any investors who feel any love for RIMM these days. However, as we wrote before, RIMM is

, and it has intrinsic value to a lot of companies for its technologies, patents, and enterprise customer base. Goldman Sachs seems to agree on that. Nonetheless, even though we see intrinsic value in RIMM, it is very difficult to know when other investors would recognize that. At least two things probably need to happen before we see a bottom in its shares:

Currently RIMM has a very low P/E ratio, but that's because everyone is expecting RIMM to report loss sometime in the future, myself included. Until then, there's still hope, which is actually detrimental to its bottoming.

There is no doubt RIMM's management has not kept up with the changing landscape in the mobile world. Without any shakeup, running by the same people who allowed the company to falter is not a recipe to instill any confidence for investors. However, even with the future share price remaining uncertain, opportunities still exists for RIMM on the long side. Investors who believe there's intrinsic value of the company should consider writing put options in RIMM. Because of the uncertain nature and the downward pressure on the share price, investors should focus on shorter term put options with a high margin of margin. For example, the February 2012 $10 put option is currently at $0.24/contract, giving it > 2% yield in a 3 month period. At $10/share, RIMM will have a market cap of ~$5 billion, which we believe could really attract acquirers, thus supporting the share price at that level, at least within a 3 month period.