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September 6, 2011 9:16 pm
Research in Motion, the Canadian manufacturer of BlackBerry smartphones and PlayBook tablets, faces fresh pressure from activist shareholders concerned about the company’s recent performance and plunging share price ahead of its second-quarter results announcement next week.
Jaguar Financial, a small Canadian merchant bank with about $12m under management, has called on the smartphone company’s board to wrest power from Mike Lazaridis and Jim Balsillie, RIM’s co-chief executives.
The activist investor said RIM should replace the co-chiefs with as many as five of its independent board members charged with exploring options to maximise shareholder value, including the possible sale of the company or the auction of its patents.
“The status quo is not acceptable, the company cannot sit still,” said Vic Alboini, Jaguar’s chief executive. “It is time for transformational change. The directors need to seize the reins to maximise shareholder value before more market value is lost.”
RIM’s shares, which have lost almost half their value since the start of the year, gained 1.3 per cent to $30.52 on the Nasdaq after Mr Alboini’s comments.
Mr Alboini said the bank had canvassed support among other shareholders and “haven’t found one who wasn’t supportive”. He added: “We haven’t found any opposition.” However, Jaguar and its supporters hold less than 5 per cent of RIM’s stock and lack the financial muscle and broad support that Carl Icahn had when he called on RIM’s US-based rival, Motorola Mobility, to examine its options earlier this year.
Google subsequently agreed to pay $13.5bn for Motorola Mobility, mostly to gain access to Motorola’s more than 17,000 patents, which could help the internet search and advertising giant fend off patent attacks on its Android smartphone and tablet computer operating system.
RIM’s patent portfolio is not as large but was bolstered recently when a consortium led by Apple – including RIM – paid $4.5bn for patents owned by the now defunct Nortel Networks.
The BlackBerry maker’s shareholders have grown increasingly restless over the past six months as its stock has fallen in the wake of a series of setbacks. The company’s earnings have missed expectations on several occasions, and its has been forced to reduce its financial forecasts because of product delays and declining market share in the crucial US market because of competition from Apple’s iPhone and Android-based devices.
Earlier this year, RIM successfully fended off another attack when activist investors called for a shareholder vote over the company’s dual chief executive structure. On that occasion, RIM’s board managed to convince the investors to back down ahead of a shareholder meeting, while agreeing to study its structure and report back about possible changes by early next year.
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