I argue that if you like a punt, it is.

But let's not kid ourselves -- this is a punt -- it is a highly-speculative trade.

The "analysts" all hate the stock here. Of course how many of them hated it at $70?  None, or close to none.  I was one of the few who said they were channel stuffing and had trouble, and would get nailed.

Now it's time to look at it differently.

Why?

Their new CEO has pulled his head out of his ass, basically.

Look, the firm is generating $1 billion of free cash flow off ~$4 billion in sales.  This is not a company that's going bankrupt.  Their loss was a non-cash charge (goodwill and inventory write-down) which isn't good but it's not the same thing as an operating loss.

Goldman was telling people to play call spreads going into earnings.  That doesn't appear to be something that's going to pay, but buying the stock on the dive after it re-opened is another matter.

The QNX-based phones will be important, if they work.  If (and I stress "if"!) RIMM can get devices out later this year, more-or-less "on time" and can capitalize on what should be material power budget improvements then you have a foundation.

Now couple this with the rumor flying around that at least one carrier has had it with the Apple subsidy bleed that they're taking in the butt from Apple's business model and the potential is there to capitalize on the business model issues. 

Again, I'd like to see RIMM open their devices to Android apps.  And they can -- with a literal decision as opposed to technology changes!  The Playbook, which runs the same OS as BB10 phones, can support nearly all Android apps; RIMM simply blocks making it "easy."

That's a business decision.  It's one that can be made in a literal afternoon.  And if it is then nearly all of the Android apps suddenly become accessible on BB10 handsets and Playbooks.

The new CEO has recognized that "steady as she goes" is going to sink the ship eventually, and has both gotten rid of some of the old wood while at the same time looking to reduce costs and get a handle on the operating complexity of the firm.  He's also now publicly open to either M&A or other "creative" opportunities, which puts the firm officially in play.

Yeah, it's a dangerous play.  But among other things you have jackasses like Cramer and touts in the analyst community who have a history of piling you in both long and short the wrong way and this isn't a company with a cash problem.  The firm has no debt, is selling well under book value and thus has no issues with running out of money in execution of their strategy.  Add to this a substantial short interest (~10%+ of the float) and you've got the potential for a nasty little squeeze on top of it.

Heins change in view is what you want to see when a new CEO comes in.  After his disastrous "I have the helm and all is well" introduction he's changed his tune and started to go beyond words and into the action phase.  I'm willing to give him the benefit of poor words rather than poor judgment given the time -- frankly, had I taken over the company my first "press" would have been "I'll talk with you at the next quarterly release; for now I have to assess and get to work" rather than "steady as she goes", but the point where he is now is good rather than bad.

I still maintain, as I did previously, that the firm ought to open their devices to Android apps right now, as it would give the Playbook a monstrous shot in the arm in terms of user acceptance and build people's desire to buy BB10 phones that can do the same thing. 

Perhaps RIMM has a plan that they believe will "work" to build some sort of "ecosystem" around their own offerings.  If so that's fine, but there's no reason not to hedge the bet -- and the Android app base, which can right now, today, run on the Playbook and thus on the BB10 architecture, is one of those steps that could be taken right here and now and result in a material change in user value.

Unlike the last trade I talked about this is more of a look at valuation and fundamentals -- and recognition that the company may be turning the corner -- than a technical trade.  This is an extremely speculative position -- but the fact that the new CEO recognizes that cost-cutting, realignment of the models marketed to market demand and that the people who have been running the joint haven't been getting it done over the last year is a good sign.

It's tempting to wait for a couple of quarters for proof that Heins is not blowing smoke but the problem with doing so is that the probability of a 30% move by that point in the north direction is very real, and I want to be selling into an $18-20 stock price rather than trying to chase it higher. 

Never mind that if they succeed and the argument continues to work with the stock @ $20 you can always buy more.

Disclosure: Bot @$12.66 last night in the aftermarket; whether I'll sit on or add to the position further is subject to what both the stock does and what the company does. As always my view is subject to change when the information available to me changes, and this position is one that could last anywhere from a few hours to several months or more.