RIM Shares Slip Below Book Value
The bad news at Research In Motion just keeps getting worse.
On Tuesday, the BlackBerry maker’s stock closed below $20 for the first time since 2004, dragged down by a Veritas report predicting the company’s market share is globally headed for the single digits. “Clearly, it’s now single-digit market share in the United States — soon, I think it will be single-digit worldwide,” Veritas analyst Neeraj Monga told the Globe and Mail.
Today brought with it more ugly news. RIM shares continued their downward spiral, hitting a new 52-week low of $18.61, well below its book value of $18.92 at the end of last quarter, according to Bloomberg. That move dropped RIM’s already much-diminished market cap south of $10 billion — $9.78 billion as I write this.
A brutal decline for RIM, whose shares once traded at $147.55, and a nasty hit to the personal wealth of its founders, who are little more than half-billionaires now. With 28,143,312 shares, or 5.37 percent equity, RIM co-founder Mike Lazaridis is worth about $523.7 million (assuming a share price of $18.61). With 28,680,490 shares, or about 5.09 percent equity, his partner, Jim Balsillie, owns about $496.5 million.
Ugly. Clearly, Balsillie’s not going to be bidding on any hockey teams any time soon.
That is, unless RIM can get its act together, something it desperately needs to do. As Canalys analyst Tim Shepherd said in a research note today, “RIM needs to deliver new, fresh, exciting products to the market and increase its pace of innovation and execution if it is going to have any chance of reasserting its position in North America. It badly needs to deliver on its potential with its new BBX platform.”
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