Research In Motion does need drastic change
Investors are discouraged by the business-as-usual message from the company's new CEO.
Lazaridis, who founded the Canadian technology company in 1984, is becoming a vice chair of RIM's board and will provide "strategic counsel" to new CEO Thorsten Heins. The company also named Lazardis the chair of something called the Innovation Committee, which seems ironic given the notable absence of that quality at RIM for years. Balsillie remains on the board.
The former CEOs, who ran Research In Motion for more than two decades, remain big shareholders in the Canadian company. That may explain why Heins told analysts in a conference call Monday that no "drastic change" is needed.
"We need to fight back and get stronger," Heins told Bloomberg News. "You will see and hear much more from us."
The following video has more from Heins about the company.
Post continues below.
Wall Street was not buying whatever the German native was trying to sell. Shares of RIM, which have plunged about 75% over the past year, fell more than 8% Monday afternoon to $15.62, underscoring how little faith investors have in any improvement. It's easy to understand why.
Gartner estimates that RIM's share of the global smartphone market plunged to 11% in the third quarter from 15% a year earlier and from nearly 20% in the fourth quarter of 2008. Once Canada's most valuable company, RIM has seen its market capitalization fall from more than $70 billion a few years ago to less than $9 billion.
RIM's execution has been dismal. Last month, the company announced a delay in the introduction of a new BlackBerry line until a new chip was available. Time, though, is not on RIM's side.
Though the new CEO says otherwise, drastic change is exactly what RIM needs. It will be hard for the company to plan for the future if the past (two ex-CEOs) will continue to play significant roles there. Yahoo (YHOO) former CEO and co-founder Jerry Yang got the message and has severed ties with the Internet portal. It's a pity that Lazaridis andBalsillie didn't follow Yang's example.
--Jonathan Berr does not own shares of the stocks listed here.
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