August 12, 2020

Research in Motion Stock Hits Eight-Year Low

OTTAWA — Shares in Research in Motion fell 11 percent Friday after the company’s announcement that it would delay a new series of BlackBerry phones that it hopes will revitalize its brand.

It was the lowest level RIM’s stock had reached in about eight years. The stock ended the day at $13.44, or down $1.69.

The company said late Thursday that the BlackBerry 10 phones, which had been expected to appear early in 2012, will not appear in stores until the end of the year because of a component delay. Several analysts suggested that the company’s future might be in jeopardy because shoppers and software developers might not care about BlackBerry by then.

Kris Thompson of National Bank Financial titled his research note “Likely Game Over,” and Mike Abramsky of RBC Capital Markets cut his target price for RIM to $16 from $20. He said in his note that delay would make RIM “significantly late to the high-end smartphone market, risking further share losses and competitive developer momentum.”

During a conference call Thursday, Mike Lazaridis and Jim Balsillie, the Canadian company’s co-chief executives, said that until the new phones arrived, they would focus on current BlackBerry models through increased advertising and other promotions.

Canalys, a market research firm, said that RIM’s share of the smartphone market in the United States fell to 9 percent in the last quarter. In 2006, before the iPhone and Android phones were available, RIM commanded just under 60 percent of the market.

Tim Long, an analyst with BMO Capital Markets, predicted that efforts to push the current phones in the United States “will not work and will be a big hit to earnings.” He lowered his rating for RIM to market perform, from outperform.

“While we clearly waited too long to downgrade, we are more concerned that management’s new strategic moves will likely destroy even more value,” Mr. Long wrote.

Like some dissident RIM investors, Mr. Long suggested that the company should consider changing its senior management.

The delay in the new phone models was announced in a conference call for the company’s third-quarter results on Thursday. Net income fell 71 percent, to $265 million, from the same time period last year, while revenue was $5.2 billion, a 6 percent drop.

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