Reggie Middleton is an entrepreneurial investor who guides a small team of independent analysts, engineers & developers to usher in the era of peer-to-peer capital markets.
1-212-300-5600
reggie@veritaseum.com
On July 29th, I said After Getting a Glimpse of the New Windows Phone 7 Functionality, RIMM is Looking More Like a Short Play. RIM came out with the new Blackberry Torch and OS 6, but I remained unconvinced, and blogged RIM Smart Phone Market Share, RIP?. After some due diligence, I released a full forensic report for my subscribers, Many More Black Eyes for the Blackberry? A Complete Forensic Analysis of Research in Motion wherein I promised to give professional and institutional subscribers access to a plug and play Research in Motion "specific" valuation model that they can use to layer their own market share, penetration, growth and margin assumptions to use our proprietary, internal analytics to produce their own custom valuations. To assist those who don't follow the industry closely, I have also made available an interactive Smartphone Market Model that was built using data from Gartner, Neilson, and Canalys, among other sources.
Before I go on I want to bring to the attention of all how the market is now starting to realize what I have been claiming in my blog, and that is that Research in Motion is flirting with becoming the next Palm, and failing in the market. RIM has fallen farther than its competing handset vendors (both in market share and equity share price) who use Android, iOS and Symbian, and has also underperformed the broad market, and by a very material margin. OTM option prices have jumped significantly, rewarding those who followed the lead on BoomBustBlog.
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The model is written in Excel 2007 and is an abbreviated version of the model that we built for RIMM in house. It has 9 tabs, all of which are listed below except for the first tab which is my contact information. Upon opening the model, you should click the "Assumptions" tab and populate the green cells with the red fonts with the assumptions of your choice. Feel free to use data and trends from our Smart Phone Market Model to ensure you have the benefit of the clearly delineated historical and rcurrent trends.
After populating the assumptions tab, jump to the "Factors Driving Growth" tab and choose the player whose market share and penetration data you want to populate the valuation model for the sake of comparison. The choices are "Nokia", "RIMM", "Apple", "HTC" and "Others". This tab is annual data only.
On the next tab, you can do the same as the previous (this tab is quarterly growth). Each of the growth tabs has charts that are print and presentation quality. Just be sure to tell everyone where you got thesis, data and analysis from :-).
Other tabs in the model...
Final output is RIMM's valuation using our analytics and your assumptions as input in the assumption tab above, as well as a multivariate scenario analysis showing changes in quite a number of variables (assuming all others remain the same) and their effects on your base valuation, as well as the percentage upside/downside from the current price.
More on the Creatively Destructive Pace of Technology Innovation and the Paradigm Shift known as the Mobile Computing Wars!
Reggie Middleton is an entrepreneurial investor who guides a small team of independent analysts, engineers & developers to usher in the era of peer-to-peer capital markets.
1-212-300-5600
reggie@veritaseum.com