RIMM

Research in Motion dropped 20% today. Just as I predicted in Nov. 2009, smart phone would become a commodity and competition would intensify and margin would drop. Sure it all happened in 18 months. How should we value RIMM right now. From income point view, a p/e of 5.5 does not give you much for a negative growth company. Instead, I would turn to the balance sheet. RIMM has 3 billion dollar cash and very little debt. 3 billion cash transfer to $5.5/share. The ongoing business is selling about 13 billion dollar. The real estate and equipments probably are worth 3-4 billion dollar and Patents are worth 1 billion dollar. Given that the company is still profitable and make 2-3 billion dollar a year, I do not see the share go lower than 20 dollars (around 12 billion Enterprise value). I would buy it below 25 dollar.