Telecom & Wireless

RIM's and Nokia's Irrational Rallies

Wall St.’s uncanny new love of battered handset companies Research In Motion Ltd. (NASDAQ: RIMM) and Nokia Corp. (NYSE: NOK) continues. The stocks in each firm are up more than 40% in the past month.

The improvements do not make sense. Each continues to lose ground to leaders Apple Inc. (NASDAQ: AAPL) and Samsung. Optimists might argue that the stock prices were so low that they had nowhere to go but up. RIM has a tiny chance to improve its fortunes with a new BlackBerry 10 line. But there is no evidence that the product will have any features that would make it more attractive than the better selling smartphones. The same is true of new Lumia phones from Nokia, which run the new Microsoft Corp. (NASDAQ: MSFT) Windows mobile OS. Windows continues to have a very small portion of the global OS market, which is controlled by Google Inc.’s (NASDAQ: GOOG) Android.

Another possible cause for the increase in the share prices of the two companies is that they have become attractive takeover targets. The problem with that reasoning is that, if they are targets, why wouldn’t buyers have made offers when the stocks were at their lows.

Douglas A. McIntyre

Sponsored: Attention Savvy Investors: Speak to 3 Financial Experts – FREE

Ever wanted an extra set of eyes on an investment you’re considering? Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help guide you through the financial decisions you’re making. And the best part? The first conversation with them is free.Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.