WATERLOO, Ont. — A number of Research In Motion shareholders are expected to be spoiling for a fight as the BlackBerry maker’s executives pitch their plan for the future at the company’s annual meeting.
RIM (TSX:RIM) is scheduled to hold its annual meeting Tuesday evening at its headquarters in Waterloo, Ont. The company’s management and lacklustre stock market performance have been under scrutiny by investors and analysts in recent weeks.
“Every sentence they utter will be scrutinized,” said Edward Jones technology analyst Bill Kreher. “I think they need to be very careful in crafting their message.”
The stock, which was up 20 cents at $27.40 on the Toronto Stock Exchange on Tuesday, has been on a steep downward slide in recent months and trades for a fraction of its all-time high of more than $140.
Kreher said he doesn’t expect any major changes at the meeting but wants RIM to acknowledge any “mistakes and missteps” that have been made.
“I think there will be very little that’s tangible from the meeting, but what may be helpful is if RIM candidly answers questions from the everyday, individual shareholders,” he said from St. Louis.
“I think what we’d like to hear is a little bit more acknowledgment about the situation, about the competitive landscape and the things they need to accomplish.”
The BlackBerry maker’s management structure has come under criticism and RIM (TSX:RIM) has said it will appoint an independent committee to study the chairman’s role at the company, instead of going ahead and splitting the roles of CEO and chairman.
RIM executives Jim Balsillie and Mike Lazaridis currently serve as co-CEOs and co-chairmen of the company.
Northern Securities analyst Sameet Kanade says setting up a committee just prolongs the need to split up the roles.
“We don’t think it bodes well for the stock in the short to medium term,” Kanade said from Toronto.
“It looks nice on paper, but it doesn’t really solve the more pressing concerns of who is looking out for shareholder concerns on the board and who is looking out to make sure the CEO or the co-CEOs are taking the right and decisive actions.”
Kanade said he believes Lazaridis should be the CEO with Balsillie as the chief marketing officer or filling other roles.
“Accountability would be more direct with one person running it. There’s no one looking out for the shareholders’ interests on the board.”
He noted that administrative changes to RIM won’t necessarily help new products get to market any faster.
“It’s a fantastic Canadian icon. It’s rather a shame that it has come to this right now.”
RIM is facing increased competition from Apple’s iPhone and new smartphones using Google’s Android operating system. The company’s new PlayBook tablet has also struggled against the iPad and other Android-powered tablets.
The company is also in the middle of a transition to a new generation of BlackBerry smartphones with the same operating system as its PlayBook tablet.
Kreher said RIM’s lack of urgency about explaining its situation is “testing the patience” of shareholders.
“The longer that we have to wait to hear the company admit that they have made some mistakes and need to maybe look at this business a little bit differently, skepticism around their long-term earnings power will grow.”