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RIM – Is It Dead? – Time To Turn this Around or Sell It
 6/21/2011
By PJLouis
Tags: Blackberry, wireless, iPhone, Apple, RIM

http://online.wsj.com/article/SB10001424052702303823104576391383476312182.html?mod=WSJ_Tech_LEADTop

 

I hate to say this but; I told you so. I said this months ago, this was going to happen if RIM was not going to develop a new product that would catch with the consumer.


About three months ago, I wrote a piece, entitled “RIM – Having Deep Trouble – No Surprise”, where I said that RIM had to succeed this year or else it would be looking for a buyer.


There is not much to say except that it is time to look for buyers. As for the Canadian being reluctant to see RIM be sold to a foreign party, I understand their reluctance. However, Nortel was broken up into pieces and sold as such. Therefore, selling a Canadian high tech company is not a new thing.


If the Canadians want to save RIM, then it is time to convince the board of directors to hire new executive management now and turn this DOG around now.


Is it too late to save RIM? I don’t think so. Of course, it all depends on what the reader and I believe “saving RIM” means. As far as I am concerned, if the company can continue to operate as a going concern then we have saved the company. Then again, saving a company via acquisition is a valid way of continuing the product line; it does not mean you saved the company but at least some jobs are preserved.


The problem with most turnarounds, regardless of industry, is dealing with management’s and the board’s disbelief in what is occurring before their very eyes.


Saving this company will likely result in a smaller company. Someone will and should be fired now.


Is it easier to sell the company outright? Yes but that depends on the price. I am a big believer you can find a buyer for anything so long as the buyer gets their price.


RIM is not in a position to dictate the terms of any acquisition deal.

 
May be too late for RIM.   Now that CIO's are accepting iPhones in the enterprise, where can RIM compete?
gdt gdt
6/22/2011 
The tragedy RIM is facing is that the markets, specifically Wall Street, have this annoying tendency to impact any publicly traded company with one negative comment. Despite a company's success in overseas markets, a stock anaylst's negative review can hurt such a company. RIM is already having significant cash and credit related troubles simply because of negative analyses. It has become a horrifying fact that a handful of misinformed analysts can have such an impact. In my opinion, RIM can be saved but brokers and traders have significant interests in seeing a sale because it generates transaction fees.  In other words, any attempt to turn this company around will be met with resistance by the Street.  I did not bring up the topic of selling RIM, the Street did.
PJLouis PJLouis
6/22/2011 
I this this is the begging of the end for RIM. Their business was designed around pushing products from the top and get some adoption by consumers. Current market has drastically changed and consumer-driven products are penetrating all businesses from small to large. This is totally different market and RIM was not ready to adapt to it. I do not see how they can survive.
Vi__Di Vi__Di
6/23/2011 
{PJ Louis LLC} RIM – Is It Dead? – Time To Turn this Around or Sell It
We’ve been negative on RIM for years and would only say the end began a long
time ago.  It was called the iPhone.  The next disease was called Android.
This is only another setback in a long line of many to come.   What do you
think the market will do when BES’ share loss accelerates further?
At 0.64 EV/Revenue the stock is no longer expensive.  However, $15B is a big
acquisition, especially when the company is buying stock back and management
has indicated it will fight.
Gerard6656 Gerard6656
6/23/2011 edit 
RIM is not worth $15B.  RIM does not even own the core intellectual property that people believe it controls; a company called NTP owns it.  Has everyone forgotten the massive patent infringement litigation that resulted in RIM paying NTP over $600M?  What I am saying is that RIM cannot even claim licensing revenue for wireless email, which all smartphones support.  Talk about a lost revenue and valuation opportunity.

Other than the brand name and the diminishing customer base, RIM's product line has no intrinsic strategic value.

The company's market share loss will accelerate.
PJLouis PJLouis
6/26/2011
 
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