RIM plunges as analysts question management credibility with forecast cut

“Research In Motion Ltd. shares fell as much as 14 percent as analysts said a reduced profit forecast hurts management’s credibility and raises pressure on the company as it heads into an annual trade show next week,” Hugo Miller and Greg Bensinger report for Bloomberg.

“‘This further damages already low credibility, making them the ‘poster boy’ for a show-me story from here,’ Mike Abramsky, an analyst at RBC Capital Markets in Toronto, said in a research note,” Miller and Bensinger report. “He slashed his price estimate for RIM stock to $55 from $90 and his rating to ‘sector perform’ from ‘top pick.'”

Miller and Bensinger report, “‘Management needs to deliver on the product side,’ said Paul Taylor, chief investment officer at BMO Harris Private Banking in Toronto, who manages about $14.5 billion including RIM and Apple shares. ‘That includes competitive next-generation smartphones and building out the app library.’ Apple offers more than 350,000 software applications, or apps, and Google’s Android Market has more than 150,000, compared with more than 25,000 in BlackBerry App World.”

“RIM fell $7.24, or 13 percent, to $49.36, at 9:37 a.m. New York time in Nasdaq Stock Market trading, after dropping as low as $48.46 for the biggest intraday drop since September 2009,” Miller and Bensinger report. “At least four other analysts — Jefferies & Co. Inc.’s Peter Misek, Cormark Securities Inc.’s Richard Tse, Gleacher & Co. Securities’ Stephen Patel and National Bank Financial’s Kris Thompson — reduced their ratings on the stock… ‘The sales on their existing devices must have fallen off a cliff,’ said Matt Thornton, an Avian Securities LLC analyst in Boston who has a ‘neutral’ rating on the stock. ‘They are getting hit by a combination of a stale portfolio and heated competition on devices.'”

Read more in the full article here.

MacDailyNews Take: iPhone, killer.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

27 Comments

  1. So a 7″ screen ‘tablet’ with a few apps, no email, and a messy unfinished UI didnt work then.
    The twin CEO’s should be fired, but these kind of fools will only hire more of the same.
    Only massive price drops and BOGOF sales can save them…!

  2. Meanwhile Motorola (MMI) is UP 10% because they lost merely $81M this Q. They’ve lost hundreds of millions in the last year. Analysts loved the units-shipped numbers for their both their”smartphones” and the xoon, despite plenty of indications much of it still in channel or returned. The CEO was demure about the actual sell-through to customers, declining to give numbers, just struggling to say it was “good.” Analysts are now calling for a profit soon, and will likely have a lot of explaining to do later this year.

      1. Putting it another way, RIM is about to hit the sewer lines but RIM management in the shape of Lazaridis & Basillie still insists that turd smells just fine from down there.

          1. I knew RIM was in trouble when I played with a friend’s BlackBerry Bold (or Curve – I can’t tell the difference – BB handsets look the same to me with minor variations in plastic garnishing). 

            The way icons are arrayed on screen makes it a nightmare to navigate – worse than Nokia’s layout – so you can imagine how bad it was. To get a browser open took 3-4 steps, buried deep down in the menu layer. By the time you fired up the browser to look up something, the onscreen image would be so small it was literally like peering down a keyhole. 

            So on top of a clunky interface the on board apps were practically unusable. Why anyone would waste money on that crap I truly cannot understand. He said something cryptic about the ‘advantages’ of BBM which I took to be some sort of free chat service. I told him you could get that and more on the iPhone with Whatsapp, Fring, FaceTime and a million other messenger apps but he said he preferred a physical keyboard. 

            The trouble with dinosaurs is it takes a comet landing on the Yucatan Peninsula to show them the error of their ways. 

            RIM is out for the count, of that I have no doubt. And I’m not speaking from the standpoint of an Apple zealot. Just common sense will tell you that an antiquated OS and lack of apps will kill RIM’s market share faster than a speeding bullet.

    1. good question. but MS already has effectively gobbled up the other fading one-time market leader, Nokia. and HP already scarfed up the carcass of Palm. so to keep in the game and leverage its strong enterprise base, Dell would really has to go for it. but does Dell have enough $$’s? otherwise RIM will go to some Asian OEM.

      of course that would be the beginning of the end of Dell too.

      if the RIM twins had any brains, they would put the company on the block for sale today, while they can still get a decent price. but all they got is ego, so they will run it down two more years before they get fired and the next guy finally does that at a fraction of today’s value.

  3. RIMshot: (Wikipedia) The term [RIMshot] is often used to refer to the sting played by the drummer in cabaret shows to accentuate the punchline of a joke. As a result, a particularly obvious laugh line is called a RIMshot.

    Appropriate.

      1. Ok Paul. NOT NICE. *vomit*. Next time I need a warning. *more vomit* SICK (I guess I thought that RIM jobs might have something to do with being one of two CEOs. um… The picture is now a bit clearer).

  4. Balsillie and Lazaridis each received over $4.5M compensation in 2010. Total executive compensation has ballooned massively over the last five years. While these numbers pale compared to some of the banks and brokers, still it’s hard to imagine their performance was worth millions

    CNBC is always defending high executive compensation as necessary to retain key talent.

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