Last year analyst Mike Abramsky of RBC Capital was bullish on Research in Motion (NASDAQ: RIMM), placing the BlackBerry maker on RBC's list of top stock picks with a $90 share target price.
Now, however, Abramsky has attached another number to RIM -- 2.
That's because the RBC analyst now believes the Canadian mobile device maker should "split the Berry" by separating its phone business from its networking operations business.
(Also see: Marketing isn't RIM's big problem)
In a note to clients this week, Abramsky said, "RIM's organization, like its handsets, needs modernization. By acting now, splitting RIM into network and handset businesses may target opportunities and unlock significant shareholder value."
Abramsky argues that while RIM's oft-delayed next-generation operating system, QNX, is promising, it likely would fare better if the company was reorganized.
"Although QNX appears strong, if QNX doesn't work, or further mis-execution undermines RIM's turnaround, then RIM will be left without a 'plan B,'" Abramsky told clients.
My take: Reorgs don't matter if the same people are running the show. Let's say RIM takes Abramsky's advice and splits in two, then puts current co-CEOs Mike Lazaridis and Jim Balsillie in charge of one business each. Really, what's going to be different? These are the same guys who allowed the former smartphone market leader to plunge almost overnight into third place behind Apple's iPhone and Google's Android mobile OS and presided over the disastrous release of the BlackBerry PlayBook tablet in April.
Leadership first, organization second.
RIM closed on Thursday down 88 cents, or 3.1% to 27.27. Shares are 61% below the 52-week high of 70.54.
Abramsky wrote to RBC clients that splitting the company into separate phone and network operations units could boost shares into the $50-$56 range.
Of course, this is all conjecture and speculation, but I just don't see it.
What do ITworld readers think of Abramsky's proposal? Feel free to weigh in below.