RIM facing growing shareholder calls for action - Mobile World Live

RIM facing growing shareholder calls for action

12 OCT 2011

BlackBerry maker RIM is facing further calls from investors to make major changes amid continuing problems with its BlackBerry internet and messenger services.

RIM shareholder Jaguar Financial Corp has said shareholders totalling 8 percent of RIM’s collective ownership support its calls – first made in September – for RIM to “fix its governance problems and to pursue a value creative transaction such as a sale, merger or division in separate public companies." The option to split the company could see the creation of a network company, device company and patent company.

Jaguar, a Canadian merchant bank, says these kinds of changes are needed if the company is to boost its share price and improve overall performance.

RIM’s third consecutive quarter of disappointing results, announced in September, saw net income fall by 59 percent due to declining sales of BlackBerry devices, causing a further hit to the company’s share price.

Following the announcement of the results, RIM’s co-CEOs Jim Balsillie and Mike Laziridis – who lost their billionaire status due to the fall in stock price – said they expect to “reinvigorate sales” through a software upgrade for the PlayBook – likely to include native email support  – and a new BlackBerry device using the QNX OS, expected to emerge next year. Product delays are one of the reasons investors have become wary of the company’s ability to perform.

Jaguar said the fact RIM had no chairman between 2006 and 2009 led to an “unfocused performance” by management. “A culture of management dominance at RIM must be eliminated and replaced by proper governance oversight by a committed tech-oriented Board that challenges the technical direction of management,” Jaguar chairman and CEO Vic Alboini said in a statement.

“A transformative and respected leader is exactly what RIM needs at this stage to reorient the culture, recalibrate its competitive positing and revive the spirit of invention,” he added.

Jaguar stressed that none of the supportive shareholders have any agreement between themselves regarding “the purchase, sale, ownership or voting of RIM shares.”

RIM is currently facing more immediate challenges as its BlackBerry Services have been faltering in Europe, the Middle East, Africa, India, and South America (Argentina, Brazil, Chile), over the past couple of days.

The delays to the messaging and browsing services were caused by a core switch failure within RIM’s infrastructure, according to the company’s BlackBerry Facebook page.

“Although the system is designed to failover to a back-up switch, the failover did not function as previously tested. As a result, a large backlog of data was generated, and we are now working to clear that backlog and restore normal service as quickly as possible. We apologise for any inconvenience, and we will continue to keep you informed,” the Facebook post said.
 

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Tim Ferguson

Tim joined Mobile World Live in August 2011 and works across all channels, with a particular focus on apps. He came to the GSMA with five years of tech journalism experience, having started his career as a reporter... More

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