Veritas says RIM could fall to single-digits

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Jonathan Ratner  Oct 31, 2011 – 1:10 PM ET | Last Updated: Oct 31, 2011 3:14 PM ET
[url=http://business.financialpost.com/2011/10/31/veritas-says-rim-could-fall-to-single-digits/]

Warning that Research In Motion Ltd. is on track to deliver single-digit smartphone market share, analysts at Veritas Investment Research think the same may be true for its share price.

Neeraj Monga and Desmond Lau told clients that there is more than a 50% chance RIM shares fall below $10 within the next 12 months.

The stock is currently trading around $20.


Based on data collated from public sources, the analysts estimate that RIM lost a cumulative 4.34 million U.S. subscribers in fiscal 2011 – its largest and most profitable market.

“These are high contribution subscribers that have the wherewithal to pay up for the next great device,” the said, adding that these subscribers are defecting en mass to Android and iOS. “Therefore, we estimate that this rate of defection is bound to accelerate.”

Veritas has a sell rating on RIM shares and told clients: “Decamp before it is too late. 2012 will be a disappointment.”

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