Research in Motion's co-CEO structure is under fire and the vultures are starting to circle. After BlackBerry product miscues and a vacuum of new devices, RIM's fate is increasingly looking murky.
RIM's shareholder meeting is worth a listen just to gauge the line between the realities of co-CEOs Jim Balsillie and Mike Lazaridis. In many respects, RIM's shareholder meeting was a replica of the most recent earnings call. Many questions and few answers---at least until RIM gets new devices rolling.
According to Balsillie and Lazaridis the largest product launch in BlackBerry history is on deck to allay concerns. Some shareholders bought it. One shareholder bashed analysts who were panning RIM shares yet typing up notes on their BlackBerrys. He got applause, but most folks were disappointed with RIM. One shareholder decried the lack of marketing for RIM at retailers.
Nevertheless, concerns mount. To wit:
Through the entire hubbub, RIM's management has told customers to just hang tough because the best is yet to come. The jury is still out on that theory. "We are passionately engaged in what's best for this company," said Balsillie.
Here are the key points to watch going forward:
On that final point, National Bank Financial analyst Kris Thompson said RIM would fetch about $23 billion if acquired. The valuation behind RIM---intellectual property, capital, products and future growth---would be tricky. Meanwhile, there's a short list of companies that could buy RIM.
Thompson wrote:
We expect RIM’s global smartphone market share to fall below 10% from about 14% today. We’re not confident that RIM will ever regain global smartphone market share above 10%. Based on this assumption, our cursory analysis is that the company may be able to operate a successful niche enterprise business and own a small percentage of the consumer market generating about $1.5 billion of operating cash flow per year...Only a handful of potential acquirers that we have identified have enough net cash & investments to acquire RIM: Apple, Cisco, Google and Microsoft.
And that short list of potential RIM buyers has flaws. Cisco is too distracted to buy RIM. Apple doesn't need RIM. Google is a possible acquirer, but fixing RIM would mean work (and three mobile OS flavors). Microsoft has Nokia.
In the end, RIM could either change leadership as Wall Street circles or go private. One thing is clear: The pressure on RIM is intense.
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