Activist RIM investor stokes shareholder uprising
Canadian bank says 8% of RIM shares back call for sweeping changes, possible sale
Last month it was Carol Bartz and Leo Apotheker. Are Research in Motion co-CEOs Mike Lazaridis and Jim Balsillie next to be forced out of the corner office?
That's the goal of Jaguar Financial Corp., an activist investor of RIM which claims its initiative for dramatic change has the backing of shareholders possessing 8% of the BlackBerry maker's outstanding stock.
Jaguar, a Canadian merchant bank that targets underperforming companies, wants RIM to hire a new chief executive to replace current co-CEOs Mike Lazaridis and Jim Balsillie, and to put itself up for sale, either as a whole or in parts.
Jaguar Financial Corp said it expects the percentage of RIM stock that supports its position to keep rising as it talks with more institutional shareholders about joining its campaign for sweeping change.
The company's demand for change is being well-received on Wall Street. Shares of RIM (NASDAQ: RIMM) climbed Tuesday morning to as high as 24.38, or 5.0% above Monday's closing price of 23.23.
(Also see: RIM is the Newt Gingrich of the tablet market)
RIM is among small group of major technology companies -- along with Yahoo, HP and Nokia -- for which the past two years or so have been a disaster. (Netflix may soon be joining the club.) The leaders of all four companies have been the subjects of withering criticism from shareholders, analysts and the tech media. Yet they have been continually defended by their respective boards.
Well, the CEOs of Yahoo (Bartz) and HP (Apotheker) finally were fired by their companies' respective directors in September.
There's no reason now to believe RIM's Lazaridis and Balsillie are any less vulnerable, not with RIM's crumbling smartphone market share, or the poor sales of its BlackBerry PlayBook tablet, or the six-year low in the company's share price, which is down 60% for the year through Monday.
Something has to be done to turn around the company or at least salvage some shareholder ROI through a sale. As it stands now, RIM is poorly positioned in terms of technology and assets to compete with either Apple's iOS or Google's Android. This doesn't bode well for the Canadian device maker's future as a stand-alone company.
Which means a sale of all or part of RIM is pretty much inevitable. First, though, will come changes at the top. It's just a matter of when. RIM delivered some horrendous second-quarter numbers in mid-September. One more earnings report like that (Q3's is due in mid-December) probably would force the shareholder-pressured board's hand -- if it waits that long.