RIM has "lost it": Shareholders call for company break-up, or sell-off

RIM has "lost it": Shareholders call for company break-up, or sell-off

Summary: Shareholders led by Jaguar Financial are calling on the BlackBerry maker Research in Motion to be "broken up" or "sold off", as the company struggles into the New Year.

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As Research in Motion continues to struggle into 2012 with its failing PlayBook tablet and considerable price slashes, a group of shareholders is calling on the Canadian company to be broken up, or put up for sale. At the least, it appears that RIM may be moving toward naming a new chairman.

According to the Financial Post,  RIM is leaning toward a new chairman, Barbara Stymiest. She would replace co-CEOs Mike Lazaridis and Jim Balsillie. The Financial Post reported:

A committee of seven independent directors of RIM’s board, including Ms. Stymiest, have been examining the company’s board structure, including the merits of having an independent chair rather than a lead director and the “business necessity” for Messrs. Lazaridis and Balsillie — who are also co-CEOs — to hold significant board titles.

Meanwhile, the calls for a breakup continue---led by activist' shareholder Jaguar Financial, whose chief executive Vic Alboini spoke to the BBC's World Service this morning.

Alboini said that: "The party is over", adding that many have "lost confidence in the management team". He went on to say it would be an ideal opportunity for value investors to step in, saying "RIM is worth a heck of a lot more than what it is currently trading at."

The company's share price has plunged more than 75 percent in 2011 after a series of outages that spread over five continents including the United States and Canada, over a period of four days. RIM has also struggled with poor sales and persistent delays of product launches which failed to drum up consumer interest.

Alboini said that while the company could be broken up, the "iconic" BlackBerry smartphone range could continue. He also said that the management team in Canada was also "iconic", but that the "legacy was over": the issue now is how to drive the business forward from the brink of collapse.

The 75 million BlackBerry subscribers that the company operates should be "opened up to all smartphones," Alboini said, signalling that should 'rebel' shareholders get their way,  the security and encryption features that the network offers could reach third-party phones.

"Under the direction of the [current] CEO, we think that this business could be more than its current $22-23 [share price] value", he said.

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Topics: Security, Banking, Mobility, BlackBerry

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29 comments
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  • RE: RIM has

    Another perfect case of a hip and smart enterprise NOT innovating when they had the lead. It's pretty sad. RIM started something truly amazing back a few years ago. Stock was high, the shareholders were happy, the competition wasn't near RIM until someone called Steve Jobs released the iPhone in 2007. It was already too late for RIM...
    Banzaii
    • Canadian companies innovation < American companies innovation

      @Banzaii ... I feel for my old boss, went to work there. He'll land on his feet.
      HollywoodDog
  • RE: RIM has

    I wonder if Michael Dell has any advice for the RIM CEOs?
    kenosha77a
    • Interesting that I wasn't the only one to see the parallel

      Apple was exactly in this situation until a little company called Microsoft bailed them out. I wonder if anyone will bail RIM out and in 15 years, they will be bigger than Apple? Unlikely but still interesting that we both saw the similarities in the stories.
      toddybottom
      • RE: RIM has

        @toddybottom

        To complete the parallel, RIM would have to fire the current CEOs and bring in a charismatic leader. Unfortunately, those individuals are rather hard to find. (I actually thought Amazon's Jeff Bezos might fit that role.)

        And there was some online "scuttlebutt" reflecting a possible Amazon buy out of RIM. If Amazon could get into the smartphone business on the cheap, it might not take 15 years before Amazon became bigger than Apple or Microsoft. (Unlike Apple and Microsoft which require a continuous introduction of innovative products to prosper, Amazon just has to "sell stuff", like Walmart, to prosper.)
        kenosha77a
      • RE: RIM has

        @toddybottom only one little problem with your story.[b] it is a complete lie[/b] I understand you are a true believer in the world according to Microsoft. But Microsoft bought non-voting stock (which has since been sold for a tidy profit) as part of a settlement. Seems Microsoft built Windows Media Player using stolen Apple QuickTime code. Rather than have the truth come to light, they (Microsoft) bought $150 million in stock while Apple had $1 billion in cash and other liquid assets. But you keep believing what you religious leaders in Redmond tell you. And you keep praying to Redmond 5 times a day ;)
        Rick_Kl
      • RE: RIM has

        @Rick_Kl A lie, huh? The stories Redmond tells, huh?

        How about you read Jobs' biography? Let me save you the trouble with some excerpts:

        "Jobs recalled: I called up Bill and said, ???I???m going to turn this thing around.??? Bill always had a soft spot for Apple. We got him into the application software business. The first Microsoft apps were Excel and Word for the Mac. So I called him and said, ???I need help.??? Microsoft was walking over Apple???s patents. I said, ???If we kept up our lawsuits, a few yearsfrom now we could win a billion-dollar patent suit. You know it, and I know it. But Apple???s not going to survive that long if we???re at war. I know that. So let???s figure out how to settle this right away. All I need is a commitment that Microsoft will keep developing for the Mac and an investment by Microsoft in Apple so it has a stake in our success.??? When I recounted to him what Jobs said, Gates agreed it was accurate."

        "The Microsoft announcement, along with Jobs???s passionate reengagement with the company, provided a much-needed jolt for Apple. By the end of the day, its stock had skyrocketed $6.56, or 33%, to close at $26.31, twice the price of the day Amelio resigned. The one-day jump added $830 million to Apple???s stock market capitalization. The company was back from the edge of the grave."

        Yep, clearly the story is a total lie. So much of one, that it got almost an entire chapter devoted to it in Steve Jobs' own biography where he admitted needing Microsoft's financial investment to make Apple solvent again...
        Captiosus
      • RE: RIM has

        @CAPTIOSUS While mostly accurate I read the book, and your statement that "Apple needed Microsofts investment to remain solvent" is not in the book. Apple wanted to show MicroSofts commitment to the Apple platform, and a token investment would show that. To further show that Apple was not in financial straights was the fact that PRIOR to the famous August event that apple stock had risen from 13 to 20 dollars a share. Granted apple's sales had dropped 30% that year there was plenty of money nearly a billion in the back at the time. Also, if you read the book you know that Larry Ellison had repeatedly offered to buy the company for steve, so there was absolutely no need for the money.

        {later edit}
        Ok, in another chapter page 966 on my iPad. It said the following. "For the fiscal year that ended when Jobs became CEO in Sept 1997, Apple lost $1.04 billion." "We were less then ninety days from being insolvent," he recalled. Anyway later in the paragraph it says he announced a profitable quarter in January of 45 million. For the full 1998 year apple turned a 309 million profit. Now if you took a piece of this isolated WITHOUT reading the entire chapter where Steve decreased the number of machines(simplified the lineup), and dropped the clones, this occurred ALONG with the announcement of Microsoft Office. These two items combined reinvigorated the company.

        Anyway getting back to the parallels between them and RIM, is that truly that company lacks focus. And if they could do anything it would be as many have stated here and that is to leverage the best thing they have and that is BES unfortunately if its not too late already. If I were them I would seriously consider breaking the company into two pieces, services(BES) and sell off the hardware piece. The money gained from the hardware sale could give them enough cash to push for BES to manage Android, iOS, and windows phones.
        Johnpford
      • RE: RIM has

        @Captiosus where were you in 97? Apple had a billion in cash and s
        liquid assets. Microsoft settled due to the anti-trust trill, and the impending judgement against them. Microsoft had direct access to the source code for QuickTime for windows, which they used to create Windows Media player.

        Quick overview: http://www.zdnet.com/blog/apple/stop-the-lies-the-day-that-microsoft-saved-apple/7036
        Or you can read this:
        [q]1994 - Apple v. Intel, Microsoft, San Francisco Canyon Company
        Apple wasn't amused when a company it hired to build QuickTime began working with Microsoft and Intel on a Windows video technology called Display Control Interface. Apple sued all three companies. It accused San Francisco Canyon Company of using Apple's code in the Microsoft product and Microsoft and Intel of knowingly helping the software contractor steal thousands of lines of code developed for Apple. Microsoft ended up releasing its Video application sans the alleged QuickTime code.
        [b]The issue was finally put to rest in 1997 as part of a wide-ranging settlement deal with Microsoft: all lawsuits were dropped, Internet Explorer became the default browser for Macs, and Microsoft agreed to buy $150 million shares of Apple stock and continue developing Office, IE, and other Mac tools for five more years.[/b][/q]
        A settlement is not what Microsoft wants the public to know: Microsoft used stolen QuickTime code to create WMP, and also used the stolen code to hamper QuickTime adoption.
        http://news.cnet.com/8301-31021_3-20003807-260.html
        I???ve given links to provide additional information and sources. If you choose to believe a Microsoft press release, over the truth, then no facts will ever get through to you...
        Rick_Kl
      • RE: RIM has

        @toddybottom
        LOL. MS didn't bail out Apple. Answer me this... How does a company with 1.2 billion in cash in the bank (Apple) get "bailed out" by a company (MS) with a measly $150 million???
        You really believe everything the media and MS spew forth. Seriously???
        There was no freaking bailout. Everybody believes what they want to believe but when the truth hits them in the face they refuse to believe it because they don't want to hear it. The news media would never steer us wrong. They never lie nor do they twist anything to where the truth is not even recognizable. And I have some land in Florida I'd like to sell... :-)
        rpollard@...
  • RE: RIM has

    What do shareholder know about running RIMM. Do any of them have experience running a similar company??? If not, why would anyone in RIMM value their opinion? These whinning investors couldn't run a lemonade stand let alone a profitable billion dollar company that is growing(they grew from 50 to 70millions users in the last year fyi)
    pfezziwig
    • RE: RIM has

      @pfezziwig
      What is RIMM? And do you really think the term "whinning" belongs in any rational dialogue?

      By the way, did you see that RIM priced the Playbook at $299 for ALL models. Really?? It's like they did a bunch of coke over the weekend and sent out a press release.
      chrisbranning557@...
    • RE: RIM has

      @pfezziwig These shareholders are the OWNERS of the company. Regardless of the outrageous opinion you're suggesting, one does not (and can not) ignore the shareholders. The CEOs are employed by, and can be fired by, the shareholders via the board, not the other way around.

      "why would anyone in RIMM value their opinion?" Now I've read it all on ZDNet.
      jgm@...
  • Too late

    The RIM co-chairmen already turned down Amazon's offer. Yahoo! made the same mistake [with Microsoft] under Jerry Yang's leadership.
    Rabid Howler Monkey
    • RE: RIM has

      @Rabid Howler Monkey They also rejected Microsofts lower offer. Microsoft wants more patents to assign to Mosaid, the patent trolls. Sine there little to no interest inn Microsoft???s "God-Phone" (the Microsoft Lumia 800), and the OEMs are getting leary of being zuned*. Microsoft must destroy the competition using the court system. Consumers have overwhelmingly rejected the "God-phones", for get this Android phones!!! lol<br><br><br>*Zuned: verb being screwed over by Microsoft after supporting them. Like having someone pull a rug out from under your feet at the top of a flight of stairs.
      Rick_Kl
  • Clueless investors

    How exactly would a iOS / Android / WM / device work on RIM's secure network (NOC)? RIM is able to provide the NOC and the features it provides due to owning and controlling the whole stack. They wouldn't have that on any other platform so it won't work. Considering the struggles they have retro fitting QNX to work on the NOC (which they own) the chance of any other OS working with it are zilch.

    The only way things will change at RIM is if another party gets a controlling share (Co-CEO's still own the controlling 10% share) or they get acquired. Jaguar folks are just vultures looking to turn a profit, similar to a house flipper.

    RIM actually increased in Dec, one of their main issues is a total lack of marketing. For years they depended on carriers to help push their brand. Now that at&t is in bed with Apple and Verizon has their own line of Android they need to be more aggressive marketing. During the NBA, new years eve there has been an increase in this with the Be Bold commercials let's hope they continue as QNX 2.0 / BB 10 rolls out in Feb.
    MobileAdmin
    • You're kidding right?

      @MobileAdmin

      Calling out investors for acting like...investors?

      Fact is, RIM lost oodles of investor money over the past few years. The investors are only trying to salvage what little they can of their money without losing it all.

      Nobody wants to pay RIM for their overpriced platform anymore for whatever imagined security benefits it offers. Cost of entry is too high (paying for phone CAL's on top of the hardware, and the expensive cost of BES), phones aren't innovative enough (have you ever used a Pearl keyboard?!?), and the unnecessary headaches and complications that their platform introduces in implementation just aren't worth it.

      If RIM wanted to salvage the situation, they should've done what I've suggested years ago: license ActiveSync.
      Joe_Raby
      • RE: RIM has

        @Joe_Raby

        OMG more FUD. ActiveSync is NOT a MDM. It's a stupid email connector to provide a "push like" option.

        BES Express is 100% free if your company is that cheap, NO licensing period. The pearl? That's from what 2005? Please try a Bold 9900 series and tell me outside of Apps what it cannot do that other devices have?

        How complicated is BES to setup? Setup a service account and install a server. RIM's main competitor (Good Technology) is seeing record adoption and it uses the same model, they have a NOC, use a service account and is 3X the cost of BES so you better get some budget and training in line.

        Microsoft has not provided new features for EAS in years. It's a poor man's approach and doesn't meet any enterprise needs for a mobile deployment in a thousands of devices.
        MobileAdmin
      • RE: RIM has

        @Joe_Raby

        BTW RIM lost the bulk of their value FROM investors shorting the stock and analysts who are pumping other players in the market. If RIM was a stateside company the SEC would investigate the fraud going on.
        MobileAdmin
      • @MobileAdmin

        "BES Express is 100% free if your company is that cheap, NO licensing period."

        WRONG! BES Express supports up to 75 users. In the last 4 years they changed that from being 1 user on BPS (which didn't support Exchange 2007 until it became BES Express 5 a couple years later) and 30 user CAL's maximum, up to 75, but only 1 was included free. They only made it completely free late in 2010 when they were already losing massive market share.

        "How complicated is BES to setup? Setup a service account and install a server"

        That's how they would title it, but the document is over 150 pages long due to access restrictions that have to be configured manually, and stupid DCOM settings that have to be set because the setup program is either too stupid to set it up for you, or because it isn't allowed to access Windows settings that it shouldn't be touching.

        "OMG more FUD. ActiveSync is NOT a MDM. It's a stupid email connector to provide a "push like" option."
        "Microsoft has not provided new features for EAS in years."

        Who's spouting FUD now? You don't have a clue about ActiveSync. Please stop talking - you're embarrassing yourself.
        Joe_Raby