Simply put, you can't change a company without changing its management - Andy Grove - Only the Paranoid Survive
STOCK MARKET FALLING STAR Research in Motion (RIM) might have won itself attention from Microsoft, the increasingly mobile phone hungry software behemoth.
RIM posted disappointing financial results last week and has earned itself some scorn from financial analysts for its poor performance and uninspiring releases. This negative trend has rubbed off on the firm's financial worth, which has fallen like investors' jaws. This drop off could see it bought by Microsoft or Dell, according to a financial analyst and investor.
When RIM released its financials early this month it was positive in the face of adversity. "RIM's business is profitable and remains solid overall with growing market share in numerous markets around the world and a strong balance sheet with almost $3 billion in cash," said Jim Balsillie, RIM's Co-CEO. "We believe that with the new products scheduled for launch in the next few months and realigning our cost structure, RIM will see strong profit growth in the latter part of fiscal 2012."
In addition, the firm also announced redundancies, though much lower down on its announcement. Job cuts do not tally well with positive talk, even when they are dressed up as a "reallocation of resources".
While Morgan Stanley chose to rubbish the firm before it released its financials, saying, "We believe RIM has now squandered nearly every opportunity and competitive advantage it enjoyed through ineffective R&D resource management, delayed product launches and misreads of the competitive environment", BMO Harris Private Banking gave it a little breathing space before telling everyone that as a company its its own right, its game is over.
Bloomberg reports on a research note, which we have not been able to get hold of yet, that said Dell and Microsoft might be tempted to invest in the firm, particularly as its value wouldn't raise many eyebrows in the accounts department.
"Given how significant the deterioration of the stock price has been, that alone will cause interest," said Paul Taylor, chief investment officer at BMO Harris in Toronto. "RIM still has meaningful market share in the U.S. and meaningful market share internationally, and RIM has an iconic brand."
RIM does have an iconic brand, as does Skype, and as does - or maybe, did - Nokia, and both of those have been courted successfully by Microsoft in recent months, regardless of whether they were profitable or not. µ
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