RIMM Announces Pursuit Of Strategic Options, Retention Of JPM And RBC, Operating Loss For Q1

Tyler Durden's picture

Update: It appears that when a company calls the market's bluff with a forced strategic alternatives announcement coupled with the phrase "challenging financial performance", the market does not like it very much. Stock now down 13% and sliding.

RIMM stock was just halted, preceding an announcement that JPM and RBC have been retained for "strategic purposes", as well as an operating loss warning for Q1 and notification of major headcuts. In other words, the endgame for RIMM is here: either the company finds a suitor or it may well be game over. For the benefit of RIMM longs we sure hope FB is eager to spend some of its cash soon if not quite soon.

From the release:

Research In Motion Limited (RIM) , a world leader in the mobile communications market, today provided a business update from Thorsten Heins, the Company's President and CEO.

"During the Q4 2012 and fiscal year-end financial results conference call on March 29, I said that I would provide our shareholders with candid and timely updates when possible on the progress and challenges RIM is experiencing. While we are no longer giving quantitative financial guidance, I wanted to provide a brief business update at this time, and will provide more details when our Q1 financial results for the quarter ended June 2, 2012 are released on June 28.

In terms of challenges, as I mentioned on the March financial results conference call, RIM is going through a significant transformation as we move towards the BlackBerry 10 launch, and our financial performance will continue to be challenging for the next few quarters. The on-going competitive environment is impacting our business in the form of lower volumes and highly competitive pricing dynamics in the marketplace, and we expect our Q1 results to reflect this, and likely result in an operating loss for the quarter. We are continuing to be aggressive as we compete for our customers' business - both enterprise and consumer - around the world, and our teams are working hard to provide cost-competitive, feature-rich solutions to our global customer base. On the positive side, we expect to further increase our cash position in Q1 from the approximately $2.1 billion we had at the end of fiscal 2012.

Despite the current challenges, we have made significant progress on a number of fronts in the past few months:

--  Our annual BlackBerry World conference and BlackBerry 10 Jam took place earlier this month and both were tremendously successful. More than 5,000 developers, partners, carriers and enterprise customers from 115 different countries saw the first glimpses of our next-generation BlackBerry 10 platform and their response was encouraging.
--  Our developer partners have been enthusiastic with the BlackBerry 10 Dev Alpha prototype unit we distributed at BlackBerry World and many are well underway in developing applications to be ready for the launch of BlackBerry 10 in the latter part of calendar 2012.

--  The support and enthusiasm from our developer community is also reflected in our app growth, where we now feature more than 80,000 apps, which represents a 220% increase from one year ago, and more than 15,000 apps for PlayBook compared to less than 2,000 last year. We believe this bodes well for our ecosystem as we get set to launch BlackBerry 10.
--  We are making steady progress with the innovation of our next-generation BlackBerry 10 mobile computing platform, which is still on track to launch in the latter part of calendar 2012.
--  Our global subscriber base continued to grow this quarter to approximately 78 million, driven primarily by growth in international markets, which is partially offset by high churn in the United States, and our BBM user base has grown to approximately 59 million users globally.
--  Our strong brand internationally was recently enhanced with the successful launch of two new BlackBerry 7 phones in India and Latin America.

We continue to make strategic changes to RIM's senior management team with the hiring of two key new members to RIM's executive leadership team. Kristian Tear, our Chief Operating Officer, whose background also includes extensive experience in international sales in Europe, Asia and Latin America, and Frank Boulben, our Chief Marketing Officer, who will provide our team with deep experience in the mobile computing and communications industry. Both will assist me and the existing executive team as we continue to make the organizational changes necessary to position RIM for the future and prepare for the launch of our new BlackBerry 10 platform.

The CORE (cost optimization and resource efficiency) program we told you about previously is focused on delivering key operational savings through various initiatives. The financial objectives for the CORE program are targeted to drive $1 billion in savings by the end of fiscal 2013, based on our Q4 run rate. We are targeting better efficiency and use of resources in our sales and marketing initiatives to effectively leverage marketing windows and evaluate our country portfolio to determine where it makes sense for us to prioritize our efforts. We will also continue to review RIM's organizational structure and clearly define accountabilities for all key businesses and business processes with a goal of eliminating fragmentation, duplication and inefficiencies. While there will be significant spending reductions and headcount reductions in some areas throughout the remainder of the fiscal year, we will continue to spend and hire in key areas such as those associated with the launch of BlackBerry 10, and those tied to the growth of our application developer community. We will share more details regarding our progress throughout the year as programs are implemented or changes are completed.

To further enhance our commitment to successfully completing our transformation, after the release of our year-end financial results, we engaged J.P. Morgan Securities LLC and RBC Capital Markets to assist the Company and our Board of Directors in reviewing RIM's business and financial performance. These advisors have been tasked to help us with the strategic review we referenced on our year-end financial results conference call and to evaluate the relative merits and feasibility of various financial strategies, including opportunities to leverage the BlackBerry platform through partnerships, licensing opportunities and strategic business model alternatives.

Although we are facing challenges, we remain excited about BlackBerry 10 and believe that this platform coupled with the results of the strategic review will create long-term value for our stakeholders. We will provide another more detailed business update when we report our first quarter results in June."

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Tsar Pointless's picture

Holy hell! Could something be ANY MORE BULLISH than this news?

ZerOhead's picture

Hard to say... could be extremely bullish as long as

RIMM Announces Pursuit Of Strategic Options,

Means they are utilising their remaining cash reserves to buy put options on themselves...

 

Ruffcut's picture

Son of a fucking bitch, I sold my 40 $11 puts. 

Fuck me blue in the facebook.

Tsar Pointless's picture

That would be a FaceFuck, wouldn't it?

AlaricBalth's picture

RIMM and FB? That would be like tossing an anchor to a drowning man.

Muppet Pimp's picture

It is the perfect storm of bear-dom both on invester and consumer side.  RIM gets a big thumbs down across the board.  If you are long the stock you are a loser, period.  Now.  Having said that, if RIM would just get over their obsession with the existing blackberry design (scrap it for crying out loud) and embrace a big shiny touchscreen design that everyone else is quite content making their fortunes from, they would probably be fine.

 

 

Fukushima Sam's picture

Too bad, BBs have keyboards you can actually type on...

spastic_colon's picture

their technology must have been too hard for the CIA to crack - and they refused to give free access like others

mayhem_korner's picture

 

 

Unlike Bumbles, Blackberrys don't bounce.  (Got that tip straight from Yukon Cornelius)

catacl1sm's picture

Who, incidentally, is very into gold & silver, silver & gold.

JailBank's picture

A strong firm, a good product, and great culture. I would like to work at RIMM. Wish they were hiring. I was just saying this weekend I would like a RIMM job.

ihedgemyhedges's picture

Should've asked your girlfriend instead of your wife............

azzhatter's picture

Get a job at secret service

eclectic syncretist's picture

Bernanke says, "RIMM job in your FACEBOOK muppets."

fightthepower's picture

Fuck you Bernanke!

ihedgemyhedges's picture

RIMMberrrrrrrrrrrrrrrrrrrrrrrrrrrrrr!!!!!!!!!!!!!!!!!!!!!!!

LouisDega's picture

Tyler will send you a bill for his royalties on the term Rimberrrrrrrr

FXPortent's picture

BBM on iPhone?

Croos-Platform BBMing?

 

 

End of the road for RIMM.

spastic_colon's picture

damn - wish i worked at JPM or RBC so I could have shorted this "pre-announcement" before the market closed - although the halt must be so they can spin it bullish

Agent P's picture

It's when you fire everyone whose name starts with "D".

optimator's picture

Another week and Rimm can buy Facebook, with stock of course.

Rastamon's picture

 

 

 

JPMorgan? .... i'll make sure that i NEVER buy another RIMM product again

malek's picture

Karl Denninger will have a field day

eclectic syncretist's picture

They're going to retain JPM to gamble away what little they have left so the taxpayers can bail them all out.

junkyardjack's picture

lol what options...

Jumbotron's picture

Told this guy 2 years ago RIMM would either be bought by Microsoft or go bankrupt.  Once Outlook could be pushed/pulled on the iPhone and Android it was game over.  Who needs the added expense of a mail server just to push email out to a phone?

Then to make matters worse is to release a tablet with the name Blackberry on it and not be able to do e-mail.  Who the fuck was that dumbass that signed off on that?

Bye Bye RIMM.....back to eating real blackberries from my garden.

catacl1sm's picture

From an IT perspective, I HATE BlackBerry Server. Buggy piece of shit.

Poundsand's picture

But wait!  They just said they had a great annual conference.  That they had developers who were enthusiastic.  That their app population grew by 220, all the way up to 80k.  That they will eventually have a new product.  That the've got strong brand inhancement by their launch of an old version!

 

But it's meaningless without sales...  And with the iphone 5 coming this fall, you think their BB10 will even make a dent in the market?  Please....

 

Sokhmate's picture

enjoy your blackberries, while RIMM eats their dingleberries.

LeBalance's picture

Jamie sent a Leuitenant in for a Rimm job.

BS Harbinger Faceplant.

Eu dead

RIMM dead

Bankia executives encouraged to attend necktie party in their honor.  Really it's obligatory, we just won't take no for an answer.

And for that commentor who coined the Spanisg Acquisition - Bless You.

And for Knukles, California Uber Alles! (one of the best comments eva!)

Seasmoke's picture

And I was just going to buy that Blackberry tablet

/Sarcasm

bullmarket's picture

I have a Playbook and love it - it's all marketing.

by the way, the email works just fine.

 

no sarcasm - once msm has you they got you

 

junkyardjack's picture

haha.  I remember an interview when that Moss guy interviewed one of RIMM's CEOs and the CEO was saying we're not coming out with our latest OS until dual core phones have been perfected, then we will be the leaders in the industry.  Moss said, well don't you think the other companies will have dual core phones as well? The CEO had no answer for that, you can't possibly be that stupid...

Tsar Pointless's picture

You aren't giving the average big-company CEO enough credit - they can possibly be that stupid.

They've proven it time and again.

surf0766's picture

Maybe RIMM should get a rubber stamp with the correct date so there are no more confidence issues.... no?

Conman's picture

Gonna be an interesting stock to watch as any buyout rumor will juice this thing. In for short term retardo pop.

BankruptBanker's picture

"Pursuit Of Strategic Options?" I guess the next Blackberry will be the Facebook phone :P

walküre's picture

Tomorrow's news:

Yesterday FB reported to launching their own smartphone soon is talking to RIMM today about acquiring not just the smartphone technology but the whole company in a stock swap for stock agreement where RIMM shareholders get 1/2 FB share for 1 RIMM share. Neither of the shares have any intrinsic value but the two companies will at least have each other by the balls and just might be able to survive to see another day.

walküre's picture

stock bounced back since my posting this ..

I DIDN'T EVEN SAY IT WAS A RUMOR YET.

SHEESH, people have some restraint!

Zuck called me earlier from the honeymoon and asked for advise. He's pissed. Too many Tequila shots. What? You thought he was upset about his stock? He could care less. Mentioned something about shorting his own stock down to pennies. Fuck, I wasn't supposed to say this. Forget what I said, ok?

Ok, that's all I'm gonna say about this. No more.

palmereldritch's picture

Well I'm spilling the beans.

Zuck is planning on disseminating FB on a mobile platform via Ubuntu for Android but on the RIMM handset.

It will be marketed as FUBAR.

nodhannum's picture

RIMM, isn't that on Karl Denninger's love list?

azzhatter's picture

Denninger- long Rimm, short Apple was his call awhile back. Ouch

soopy's picture

FaceBerged and RIMMjobbed in the same day! BAM!

Crabshack's picture

FB did say they were going to shop for companies after the IPO.  FB feel they haven't leveraged the wireless market properly.  It is possible I guess.