Did You Sell Research in Motion (RIMM) Short in 2010?

Selling a stock you do not own creates a 'short' position, allowing you to profit if the Price falls. Since stocks sway Up and Down, some more than others, shorting can result in some handsome gains if your Timing (Entry & Exit) are managed correctly. Yet attempting to short any stock is a Dangerous proposition as it exposes our portfolio to Unlimited Losses. 

POTC identified a very high-profile tech stock was in trouble back in 2010 before its fall began, it was Research in Motion (RIMM) known as BlackBerry (BBRY) today.

BBRY is trading at $10.89 and appears to have reached some point of stability. We have No Opinions on individual stocks for readers of the blog anymore, we are strictly an educational spot for interested minds to visit. 

RIMM was a perfect example of analysts "falling in love" with a heavyweight type of stock, the 5th Commandment teaches us to never behave that way. Then we witnessed their frustrations as they raised price targets after RIMM missed the quarter. The 6th Commandment states, "never accept excuses from management", except for Goldman's Ms. Simona Jankowski, most of the analysts stayed bullish on RIMM.

POTC predicts the stock begins closing below $70 shortly, and June expiration is many weeks away; hold the RIMM Puts and enjoy the technical control as share price erodes under the all important 200 day line. We are very satisfied shares broke our way, realizing the last 8 Wall Street firms either Upgraded or Initiated coverage with Buy ratings in the past several weeks:
Mar 26, '10 JP Morgan Upgraded to Overweight
Mar 25, '10 Rodman & Renshaw Initiated Mkt Perform
Mar 19, '10 Wunderlich Initiated Buy
Mar 8, '10 BMO Capital Markets Upgraded to Outperform
Feb 23, '10 Stifel Nicolaus Initiated Buy
Feb 12, '10, RBC Capital Mkts Upgraded to Outperform Top Pick
Feb 12, '10 Wedbush Morgan Initiated Outperform
Feb 1, '10 Standpoint Research Upgraded to Buy

*DJ (Dow Jones) Research In Motion Cut To Sell From Neutral By Goldman Sachs (GS)

Research In Motion Ltd. (RIMM, RIM.T) was cut to sell from neutral by Goldman's Ms. Jankowski cut her price target from $73 to $65:
"its products will increasingly lose differentiation as the focus shifts from email, where RIM leads all competitors, to applications, where RIM lags both the iPhone from Apple Inc. (AAPL) and Android, an operating system of Google Inc. (GOOG). With its North American business already in decline, the broker doesn't expect international strength to be enough of an offset."
-By Steve Goldstein, 415-439-6400; AskNewswires@dowjones.com

In closing, a high short-interest in any stock must be treated with caution as our 1st paragraph explained. 

Short sellers are never perfect and have been proven wrong from time to time. Whitney Tilson's Netflix (NFLX) short and Bill Ackman's Herbalife (HLF) are 2 high-profile examples of how individual investors with limited capital could destroy their aggressive portfolios by attempting to sell short.

Thank You,
POTC~



 

Carson Block should be Investigated by the SEC for Criminal Behavior..

Carson Block of Muddy Waters on 500.com (WBAI): 

• The company has a complex tax system, apparently 70% of last year’s income was attributable to a tax benefit.

 

Carson's wording is misleading and designed to excite bears and scare bulls. Why doesn't he explain why he believes 500.com's 2013 and 2014 *10% tax rate is a 'complex' tax 'system'? 

If you ran a completely Transparent firm you would have mentioned the reason why WBAI was awarded a favorable tax rate status by certain Chinese Ministries, you'd even address the Time element. 

It's possible that Carson did enough digging and chose his words carefully enough not to be caught in a blatant lie. We're fairly certain that Carson lined his pockets with easy loot on Tuesday, we'll explain below.  

The whole truth regarding the 'complex tax system' and why 70% of last year's income was attributable to a tax benefit awarded with the designation of 'Nation Key Software Enterprise', so the co received a preferential tax rate of 10% in 2014 and retroactive to 2013. So what could be so complex about the co's tax system now?

Carson hand gesturing half-truths to the masses that continue to get juked by his manipulative and sometimes self-serving strategies. 

 

 

 

Net income was RMB75.4 million (US$12.2 million), compared with a net income of RMB11.7 million during the second quarter of 2013 and RMB27.5 million during the first quarter of 2014. The increase in net income was in-line with the increase in total purchase amount and was also attributable to the Company's designation as a  *'Nation Key Software Enterprise' by several government ministries which reduces the Company's applicable tax rate to 10%.

Non-GAAP net income attributable to ordinary shareholders excluding share-based compensation expenses was RMB83.2 million or U.S. $13.4 million, an increase of 156.8% sequentially.

But Carson Muddied the Waters and presented half-truths about WBAI in a closed door private investor meeting last Monday in New York. He said WBAI is a candidate to sell short. 

The issue we have is that Carson made these bearish comments very late in the day on a September Monday as organic volume at that point was nonexistent. His masses reacted instantly by taking to their dumbphones, shorting WBAI, and Tweeting their friends caused shares to collapse, suspicious?

 

An underhanded short-seller can do it behind closed doors and simply has to hoodwink a wealthy group of Traders to rake in a lot of cash overnight:

• he establishes a position ahead of a wealthy investor meeting,
• schedules the meeting 30-minutes or less before Market Close and or during a low volume summer day,  
• throws the word fraud around often with no proof, then he reveals his new short candidate,
• tells half-truths and uses code words to instill fear and phrases that hint at trouble, like 'complex tax system'.
• mainly targets Chinese cos where the time difference is 12-hours and Executives are asleep,
• schedules an investor meeting during a Chinese holiday when no Executives are around to defend their co 

 

On a very bearish Tuesday for stocks, September 9, 2014, and 1-day after his New York meeting where he bashed WBAI, shares actually closed up $1.00.  

 

We're confident that at least a single 4%+ late-day stock drop on very high volume and then next day rally of 2%+ has left enough rat droppings to vindicate our feelings about highly suspicious actions taken by Carson Block on Monday, September 8, and if correct then the following day would be that much easier to verify.

 

It's obviously possible for short-sellers to Game the system but it requires a multi-pronged approach and a heartless individual to carry it out. 

 

When we called Carson at 'Muddy Waters' it was exactly what we expected, his name wasn't even on the phone list. Carson works so hard that he needs a PR firm to answer his calls. As soon as we asked a question about Carson's accusations against WBAI some 20-something hung up the phone on us twice, pathetic that you can't even ask questions and challenge Carson's bogus research regarding 500.com.  

 

500.com trades under the NASDAQ ticker symbol WBAI, it is an online and mobile Internet Sportsbook and Lottery business that's never been found guilty of wrongdoing. But since it operates in China we believe it is misunderstood and it's future Sales and Earnings growth is being underestimated.

 

What Carson Block did on Monday, September 8, just minutes before close cannot go unnoticed and undocumented by the Securities and Exchange Commission (SEC).

We think Carson Block is an Underhanded short-seller flying under the SEC's radar. Hopefully more wise people will take note of his dirty actions on September 8, 2014, as well as his bad track record over the last several months. 

Thanks for Reading, Communicating, and Educating,
POTC~