Reaction roundup: analysts on RIM and Jim Balsillie and Mike Lazaridis’s $1 salaries
Despite its frequent and public thrashings, Research in Motion still had to stand before investors to dish on its dismal third quarter and issue some tepid projections for the future. RIM shipped 14 million units in the third quarter and pulled in $5.2 billion (U.S.) in total revenue, but for the upcoming fourth quarter, RIM expects 11 to 12 million units shipped and total revenue in the range of $4.6 to $4.9 billion. Then the company announced that its best hope—new phones running the BlackBerry 10 OS (renamed from BBX after losing a trademark dispute)–will be delayed almost a full year. This on top of earlier news that, despite the recent PlayBook fire sale, RIM will end the year occupying less than 1 per cent of the global tablet market. Predictably, the company’s shares plunged after the announcement, falling 11.5 per cent to $14 U.S. We round up the righteous indignation reactions from analysts and experts after the jump.
• Co-CEOs Mike Lazaridis and Jim Balsillie predicted the fallout and cut their $1.2 million salaries to just $1 (you know, like the PlayBook—if they can’t be good, at least they can be cheap. Zing!). The move didn’t impress the Financial Post’s Terence Corcoran, who said it “does absolutely nothing to change the company’s direction” and only proves that the top brass “is willing to spend time on meaningless public relations stunts.” Tech blogger John Gruber reposted the news under the telling headline “A Dollar Too Much.”
• The BlackBerry 10 delay “could be the final nail in RIM’s coffin,” according to Kris Thompson, an analyst with National Bank Financial. “It’s likely game over for RIM,” he told the Globe and Mail. “A turnaround is very, very speculative… This is truly a sad day.”
• Independent analyst Jeff Kagan wrote in a release, “RIM reminds me of a beloved grandparent. You love them, but they are very outdated and sooner or later they will be gone.” Contemporaries from Citigroup, Barclays, Canaccord Genuity and RBC Dominion Securities agreed and cut their share targets, while a few, including CIBC analyst Todd Coupland, maintained their targets.
• A pair of analysts from UBS Securities Canada—Phillip Huang and Amitabh Passi—decried the lack of compelling new products for the next two to three quarters. “In the fast-evolving world of mobile devices, this would be comparable to eternity.” Earlier in the week Huang issued a report with three suggestions to save the company: 1) replace Balsillie and Lazaridis; 2) open up BlackBerry software and apps to Android and iOS; or 3) just sell RIM outright. Yikes.
• In perhaps the saddest vote of confidence possible, Laszlo Birinyi, founder of money-managing firm Birinyi Associates, recommended investors put money into RIM shares, calling it “a long shot, but it is an idea which no one has considered… Every once in a while you want to go out there and take a shot.”
• RIM at $16: BlackBerry maker needs a new play book [The Globe and Mail]
• RIM shares dive on outlook: is management in “denial”? [The Globe and Mail]
• RIM’s outlook darkens with delay of new smartphone [The Globe and Mail]
• RIM will end year with less than 1% of global tablet market: IDC [Financial Post]
• RIM forced to change BBX name [The Globe and Mail]
• Crisis Grows at RIM Blackberry [Jeff Kagan]
• A Dollar Too Much [Daring Fireball]
• Cutting pay to $1 not worth a penny [Financial Post]