RIM (RIMM) Suitors Scared-Off by 'Rapid' BlackBerry Sales Declines in U.S.
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How bad is it at Research In Motion (Nasdaq: RIMM)?
Pretty darn bad.
Reports earlier this week Microsoft/Nokia and Amazon might have made a pass at the company spurred renewed interest in the stock, pushing shares up 10 percent on Wednesday. Several private-equity firms may also have been involved.
The Globe and Mail is reporting Thursday, however, suitors were scared away by "the rapid deterioration of the BlackBerry maker’s market share in the United States." (Emphasis ours.) The story suggested "without a change of fortune in its largest market, RIM’s future cash flow is uncertain, making it difficult to forecast how much debt the company could manage if it was acquired in a leveraged buyout."
Another concern was the separation of the CEO and Chairman roles, which are currently cooperatively held by Jim Balsillie and Mike Lazaridis. One hedge fund manager said RIM is resistant to split the roles or extinguish Balsillie and Lazaridis until QNX is released.
RIM investors take notice: not only are suitors being scared away by unprecedented sales drop-offs for its key device, but the company may be stuck with Balsillie and Lazaridis for at least another one-and-a-half years!
Shares of RIM are down 0.65 percent Thursday, but off session lows.
Pretty darn bad.
Reports earlier this week Microsoft/Nokia and Amazon might have made a pass at the company spurred renewed interest in the stock, pushing shares up 10 percent on Wednesday. Several private-equity firms may also have been involved.
The Globe and Mail is reporting Thursday, however, suitors were scared away by "the rapid deterioration of the BlackBerry maker’s market share in the United States." (Emphasis ours.) The story suggested "without a change of fortune in its largest market, RIM’s future cash flow is uncertain, making it difficult to forecast how much debt the company could manage if it was acquired in a leveraged buyout."
Another concern was the separation of the CEO and Chairman roles, which are currently cooperatively held by Jim Balsillie and Mike Lazaridis. One hedge fund manager said RIM is resistant to split the roles or extinguish Balsillie and Lazaridis until QNX is released.
RIM investors take notice: not only are suitors being scared away by unprecedented sales drop-offs for its key device, but the company may be stuck with Balsillie and Lazaridis for at least another one-and-a-half years!
Shares of RIM are down 0.65 percent Thursday, but off session lows.
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