Reeling Research In Motion still doesn't get it

The telecom continues to believe -- wrongly -- that it can go it alone.

By Jonathan Berr May 30, 2012 11:52AM
Research In Motion (RIMM), whose shares have been reeling after the company reported a surprise loss, is poised to fall further. The BlackBerry maker is living in a dream world that will come crashing down on the Canadian company sooner rather than later.

Though it announced Tuesday that it had hired investment bankers to pursue "strategic options," Bloomberg News and other media have reported that these options -- at least at this point -- do not include a sale of the company.

"If it pursues a strategic change, the company would prefer to license its BlackBerry operating system, a person with knowledge of the matter said last month," the news service noted. "Barring that, RIM would like to find a strategic investor," the source said.

The question for investors is what company would want to partner with RIM. Not surprisingly, Research In Motion said it is "excited" about the launch of the BlackBerry 10 operating system later this year. It may be alone in its enthusiasm. As The New York Times notes, the company has "struggled to draw developers into creating apps for its system." 

Amazon
(AMZN) has opted for Android to power its Kindle, and Microsoft (MSFT) is using Windows for its smartphones. There isn't much left for RIM. (Microsoft owns and publishes Top Stocks, an MSN Money site.)

Unfortunately, RIM is no longer calling the shots. Shares plummeted almost 80% over the past five years as the BlackBerry was eclipsed by the Apple (AAPL) iPhone and other products. Sales have failed to meet Wall Street expectations as its market share plunged. The company lost $125 million in the latest quarter.

RIM has been the subject of takeover speculation before, but nothing has ever come of those talks, which reportedly included Nokia (NOK), Microsoft and Amazon, according to the Times. The company's ability to make a deal diminishes by the day. Selling its intellectual property is an option, but that is like pawning your wedding ring to pay your mortgage. It's a short-term fix, not a long-term strategy.

CEO Thorsten Heins, who was brought in to clean up the mess left by company co-founders Mike Lazaridis and Jim Balsillie, has vowed to "leave no stone unturned" in his efforts to turn RIM around. But a weak company won't become stronger if it doesn't consider selling itself. 

Once again, Research In Motion is a day late and a dollar short. "Even if RIM were to sell itself or parts, analysts and bankers think that the company may not fetch what it could have a year ago," the Times said.
 
Jonathan Berr doesn't own shares of the listed companies. Follow him on Twitter @jdberr.

4Comments
May 30, 2012 7:50PM
avatar
i cant function without my BB phone and Tablet. I switched from Apple and dont regret it.
May 30, 2012 6:06PM
avatar
What a joke of an article...Have you even used a BlackBerry?  Best phone by far. OS7 rocks and BB10 will be epic!  #bebold #teamblackberry
May 30, 2012 7:34PM
avatar
Old problem, product is ok but company sucks.
May 30, 2012 12:18PM
avatar
I dunno. Smells good. But should you bite?
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

112
112 rated 1
288
288 rated 2
479
479 rated 3
645
645 rated 4
644
644 rated 5
653
653 rated 6
638
638 rated 7
483
483 rated 8
288
288 rated 9
123
123 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
AAPLAPPLE Inc10
ATVIACTIVISION BLIZZARD Inc10
CTSHCOGNIZANT TECHNOLOGY SOLUTIONS10
FOXATWENTY-FIRST CENTURY FOX Inc CLASS A10
ITUBITAU UNIBANCO BANCO MULTIPLO S.A.10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.