John Paczkowski

Recent Posts by John Paczkowski

RIM’s Stock Hits Single Digits

Research In Motion’s yearlong slide into the abyss quickened Monday as its stock price fell below $10 for the first time in nearly a decade.

Dragged down by RIM’s announcement on May 29 that it’s gearing up to report a quarterly loss and has hired a pair of banks to help it evaluate options, RIM shares tumbled 6.53 percent to $9.57, charting a new 52-week low and marking the stock’s lowest price since Dec. 22, 2003.

RIM’s market cap is currently just $5.09 billion. Five years ago, it was about 16 times that. What a tremendously ugly decline.

More dismal news for a company with profound uncertainty surrounding its future. With RIM’s investors and its customers both losing faith in it, the company’s prospects seem increasingly dim. Though RIM’s leadership insists that its current problems are temporary and the debut of BlackBerry 10 will propel the company into a turnaround, that scenario is looking less and less likely as what a few years ago might have seemed a temporary decline in competitiveness is clearly well on its way to becoming a permanent one.

RIMM Chart

RIMM data by YCharts

“We don’t see any scenario where BlackBerry 10 can compete meaningfully against the three major smartphone operating systems,” Wedge Partners analyst Brian Blair wrote in a recent note outlining the ugly prospect RIM currently faces. “Our longer term view remains that RIM will be forced to focus on the low-end, developing market segment, as we believe that remains the only available opportunity for the company. The high end and mid-tier smartphone markets simply don’t want BlackBerry anymore. The potential for RIMM to offer a more appealing, completely new and different OS, without a keyboard (initial devices won’t have it) and with no apps and no ecosystem to enterprise/consumers is incredibly slim. RIM, in short, is not a software company at its heart, and it’s been knocked out of the ring by three players that ARE software companies.”


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