Research-in-Motion is not Ford, McDonalds or Apple

Jonathan is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

It was not that long ago that Ford (NYSE: F), McDonald's (NYSE: MCD) and Apple (NASDAQ: AAPL) were all trading lower: much, much lower as a result of problems with each company and a poor economy.  At the nadir of The Great Recession in early 2009, Ford was under $2 a share.  In March 2003, McDonald's was around $13 a share.  Apple was around $7 a share in 2003, too. During The Great Recession in early 2009, both Apple and McDonald's were at much lower price levels, too, along with Ford.

In no way should that be construed as encouragement to buy Research-in-Motion (NASDAQ: BBRY) at its present share price in the single digits in hopes that it will recover.

Like Ford, Apple and McDonald's, at one time Research-in-Motion was an industry leader.  With the Blackberry, Research-in-Motion introduced the smart phone to the world.  In mid-2008, Research-in-Motion was trading at over $140 a share.  It is now around $8.  While McDonald's, Ford and Apple all rose from the price levels imposed by The Great Recession, Research-in-Motion has fallen drastically during the same time segment.  It does not look like the decline in the share price of Research-in-Motion is anywhere near being over based on the high numbers of those betting for it to fall even more with short positions.

Even when Apple, McDonald's and Ford were selling at the lowest share price, each company was still an industry leader in a very tangible, meaningful factor.  The Ford F-150 pick-up truck has always been among the best selling vehicles.  The brand name, cultural significance and market presence of McDonald's is like that of few other companies in history.  Apple has always been dominant in the high tech world.  That is just not so with Research-in-Motion currently, nor is it likely to change.

In addition, when Ford, Apple and McDonald's were selling at low price levels, so were the competitors.  That is not the case with Research-in-Motion at the present time.  Apple, a direct competitor to the Blackberry from Research-in-Motion with the iPhone, is up 69.62% for the last year of market action.  By contrast, Research-in-Month has fallen 72.10% over the same period.

McDonald's, Ford and Apple all turned it around with new products.  McDonald's brought in a whole new menu.  At long last, Ford started finally producing new cars again that were attractive and reliable like the Focus.  Apple unveiled the iPhone, iPad and iPod.  Research-in-Motion was supposed to have recently rolled out the Blackberry 10 to compete with the iPhone, but had to delay the introduction of the new smart phone...not good.

As a result, the share price of Research-in-Motion was slammed, falling more than 20% for the last month of market action.  It will only get worse: the new iPhone 5 will be becoming out soon.  Who knows if the Blackberry 10 will ever make it to the shelves.

Perhaps the surest sign that Research-in-Motion will not be rebounding is that the company has been trying to find a buyer.  There have been no takers, even at its present low share price.   In addition to no one wanting to acquire Research-in-Motion, there are plenty willing to short the stock.  At present, there is a short float of 15.56% for Research-in-Motion.  A short float of 5% is considered to be troubling for a company.

jonathanyates13 has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Ford, and McDonald's. Motley Fool newsletter services recommend Apple, Ford, and McDonald's. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.

blog comments powered by Disqus