BlackBerry: Staring at the Face of Extinction

Research in Motion (NASDAQ:RIMM) has been a nightmare for investors.   The once high-flying company has seen its shares plummeted 75 percent in just the past year.  However, shares have showed some signs of life as they have gained 5 percent in the past week.  In a desperate attempt to breath life into the BlackBerry maker, RIM is supposedly working toward a major transition that will allow it to license its BlackBerry software to third-party vendors, such as Samsung and HTC.

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BGR reports, ” Jefferies & Company analyst Peter Misek wrote that his checks confirmed earlier reports that Mike Lazaridis and Jim Balsillie will soon be removed from their roles as co-chairmen. The analyst says current board member Barbara Stymiest is indeed the front-runner to replace the pair, and he calls her one of the top executives in Canada.”  Misek goes on to explain, “We believe she will initiate a formal strategic review, possibly trim costs in the hardware business, and possibly announce additional partnerships.”

A new licensing agreement for RIM would have improve the company’s ecosystem, but investors still have to keep in mind that RIM has been unable to capitalize on smartphones and challenge Apple’s (NASDAQ:AAPL) well-established ecosystem.  Verizon Communications’ (NYSE:VZ) chief financial officer recently announced at a Citigroup (NYSE:C) conference that the company sold 4.2 million iPhones in the fourth quarter.

Furthermore, it is still unknown how third-party companies like Samsung would use the software.  Also, RIM has reportedly cancelled its BlackBerry Milan slider smartphone due to hardware issues.  Misek reiterated a Hold rating on RIM, with a $14.50 price target.  Currently, shares trade slightly above $15.

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To contact the reporter on this story: Eric McWhinnie at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com