RIM shareholder urges patent spin-off or sale: Why it's too early to quit

A RIM shareholder wants a patent spin-off and possible a sale of the company. Is the timing right?

Research in Motion shareholder Jaguar Financial Corp. is urging the company to sell itself or spin out its patent portfolio to maximize value.

Jaguar, a Canadian investment firm, outlined its case against RIM in a statement. Vic Alboini, CEO of Jaguar, said:

"The status quo is not acceptable, the company cannot sit still. It is time for transformational change. The Directors need to seize the reins to maximize shareholder value before more market value is lost."

Why is Jaguar so wound up? This 5-year stock chart tells you all you need to know.

Jaguar's case against RIM goes like this:

  • RIM shares are down more than 80 percent since June 2008.
  • RIM missed the innovation curve in smartphones.
  • Developers will abandon the RIM platform. "There should be a concerted focus for RIM to encourage or finance the development of cutting edge mobile applications. This lack of an effective ecosystem is a key shortcoming that needs to be addressed," said Jaguar.
  • The company's co-CEO structure doesn't work.
  • RIM is in danger of losing out on patent monetization and should follow Nokia, Eastman Kodak and Motorola Mobility as companies cashing out on patents.

None of those aforementioned points are all that new. Meanwhile, the timing on Jaguar's statement is notable. RIM just launched a big product cycle and while you can quibble about whether BlackBerry OS 7 has much of a shelf life, the devices are nice.

In addition, analysts are just coming around to the RIM rebound story even though there are serious doubts about the future.

What should RIM do? Frankly, it's too early to do anything drastic like announcing a potential breakup. For starters, RIM isn't on the rocks like Eastman Kodak. And the competitive environment may favor RIM, which can take share from Nokia abroad and be a viable No. 3 in the U.S. for carriers worried about Google and Apple dominance.

Now if the latest BlackBerry devices tank, Jaguar and its white flag approach may make sense. For now, it's a bit early to surrender intellectual property and its existing market share on ownership uncertainty.

Related:

CNET: RIM investor calls for sale of company or patents (report)

RIM's latest BlackBerry launch gives it window of opportunity