A Canadian investor in Research in Motion has called for the BlackBerry maker to put itself up for sale
Research in Motion is facing a call from one of its own investors for the BlackBerry maker to either sell off its patents, or put itself up for sale.
The call was made by a little known investor called Jaguar Financial.
Jaguar Financial is a Canadian Merchant bank and it issued an open letter to RIM’s board of directors in which it asked them to consider a wide range of strategic alternatives, including a possible sale of the company or its patent holdings.
Jaguar called on RIM to form a special committee to investigate ways to maximise shareholder value.
“This value maximisation process would include the pursuit of all options including a potential sale of the Company or a monetisation of the RIM patent portfolio by a spin-out to RIM shareholders,” said the letter.
“The status quo is not acceptable, the Company cannot sit still. It is time for transformational change,” wrote Chairman and CEO Vic Alboini in the open letter. “The Directors need to seize the reins to maximise shareholder value before more market value is lost.”
“Jaguar strongly recommends that RIM’s directors appoint a Special Committee of the Board consisting of four or five of the current seven independent directors to pursue a shareholder value maximization process,” Jaguar stated.
It cited a number of reasons for this.
Firstly the collapse in RIM’s share price. Jaguar cited the fact that in June 2008 shares in RIM were worth $149.90 (£94), but as of 2 September 2011, the shares are down to $29.59 (£18.54), representing a decline of approximately 80.3 percent.
Secondly Jaguar is apparently concerned at what is calls a lack of innovation at RIM, resulting in a loss of market share. It is also unhappy at RIM’s management structure, calling the situation where RIM has James Balsillie and Mike Lazaridis (pictured) acting as Co-Chief Executive Officers “ineffective and requires meaningful change.”
It also called on RIM to capitalise on the M&A activity in the tech sector, particularly regarding intellectual property, by considering selling its patents.
The call is another sign of investor unrest over the poor performance of RIM, as it struggles to retain market share against the Apple and Android juggernaut.
Sliding market share
Nielsen said that in July Android’s smartphone market share in the United States was 40 percent, compared to 28 percent for Apple iOS. Meanwhile RIM’s Blackberry share fell to 19 percent for July. These findings were backed up by Comscore, which last month found that Android grabbed a 41.8 percent US smartphone market share for July. iOS had 27 percent but RIM was down to 21.7 percent.
There is little doubt that RIM has been under the kosh for a while now, with many observers and analysts concerned at its poor performance. In July RIM announced that it was axing 2,000 staff, after the company posted a poor earnings report in June.
This earnings report revealed that RIM’s first quarter revenues had fallen 12 percent from the previous quarter to $4.9 billion (£3bn). Net income was also down, and RIM also downgraded its revenues forecasts, causing a further slide in its shareprice.
And the Jaguar open letter is not the first call for RIM to change its policies.
The company’s two bosses, Jim Balsillie and Mike Lazaridis recently came under a blistering attack from an unnamed but reportedly senior RIM employee, who lamented the “chaos” within RIM, which had placed the BlackBerry two years behind the iPhone.
To be fair however RIM has been trying to reinvigorate itself of late, amid concern over its aging handset portfolio.
In August it unveiled the newest version of its best-selling BlackBerry Curve smartphone.