Sunday June 19, 2011

Socionomics

Research in Motion is front page news, but for all the wrong reasons.  This is a good example of just how fast things can change. Computer makers change over time, the Stars of the 1970s, DEC, Wang, and Control Data are unknown to  today's Computer majors. Likewise, Lotus 123 and Wordperfect are long gone as major software players. The telecom business changes even faster. And no wonder, cell phones are a multi-faceted swiss army knife of phone, camera, internet,and gps, not to mention the latest fashion accessory. 

The latest casualty is Research In Motion's Blackberry. And then it hit me, the Blackberry was the official texting instrument of, yes, another recent fallen icon, Paris Hilton. And so I wondered if there was  a correlation between the recent rise and fall of Paris Hilton and RIMM. Before you dismiss this idea, take a look at the following chart of RIMM. A quick Google search revealed several time lines for Paris Hilton. Theirs (RIMM and Paris)  was a bottle rocket type parabolic rise, and then fall. While the graph is of RIMM, I put the comments about Paris in hot pink, it just seemed appropriate. 

 

 

Paris dropped out of high school in 1999, but when you are gorgeous and  an heiress, school is just bother rather than a stepping stone. After the first role in the movie Zoolander, RIMM hit their bottom and then took off with a more popular line of phones. RIMM's Blackberry pioneered the thumb accessible keyboard and  as well, surfed the internet. And so we have the perfect match for two rising careers. Paris followed her initial foray into movies with a TV series, the Simple Life. More movies, records, and a perfume line quickly followed. The release of a sex video only seemed to generate more buzz then disdain. Which just goes to show you, in a bull market, all news is bullish. By 2005 Playboy dubbed her the Sex Star of the Year and she landed another movie role. 

In February, 2005, as art imitates life as  Paris' Blackberry Goes Public!  Someone hacked into her Blackberry giving both she and RIMM untold free publicity.  To this writer that forever linked the two. 

A correction for both RIMM and Paris then set in. She became the World's Most Overrated Celebrity and was arrested for DWI. In a wave of things to some, she was ordered back to finish a 45 day jail sentence. 

In February 2007, Apple introduces the iPhone at the Macworld event.  RIMM would peak a year later at $150 a share, a staggering increase over its Paris Zoolander days. 

In 2008 The Hottie and the Nottie debuted starring Paris Hilton. Theaters showing the movie opening weekend averaged $249 on ticket sales. Here's a wiki quote about the movie.

The review aggregator Rotten Tomatoes reported that 5% of critics gave the film positive reviews, based on 61 reviews, concluding that "The Hottie and the Nottie is a crass, predictable, and ineptly staged gross-out comedy that serves little purpose beyond existing as another monument to Paris Hilton's vanity."

As the iPhone caught on, RIMM peaked. Paris had her Reality TV Series, My Best Friend Forever My BFF. Frankly that sounds like a description of she and the Blackberry. At any rate, that was the socionomic top for both of them. 

Today RIMM is front page on the WSJ. Here's the quote from the article linked at the start of this section. 

Shares in RIM plunged 21% to their lowest level in five years as investors questioned whether its executives can pull the company out of its slump.

 With Lady Gaga and Brittany Spears on top, we might say the same for Paris. 

And so, as RIMM went from $2 to $150 and back to $27 in a mere 8 years. Whether one is  investing in high tech or tracking the latest celebrity, it is not a buy and hold game. Social mood has its fickle side.