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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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Tue, 05/29/2012 - 16:25 | 2473275 Tsar Pointless
Tsar Pointless's picture

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

Tue, 05/29/2012 - 16:37 | 2473289 ZerOhead
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...

 

Tue, 05/29/2012 - 16:48 | 2473349 Ruffcut
Ruffcut's picture

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

Fuck me blue in the facebook.

Tue, 05/29/2012 - 16:51 | 2473355 Tsar Pointless
Tsar Pointless's picture

That would be a FaceFuck, wouldn't it?

Tue, 05/29/2012 - 17:09 | 2473406 AlaricBalth
AlaricBalth's picture

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

Tue, 05/29/2012 - 17:59 | 2473545 flacon
flacon's picture

Why is RIM so hated? 

Tue, 05/29/2012 - 20:15 | 2473817 Muppet Pimp
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.

 

 

Tue, 05/29/2012 - 23:38 | 2474139 Fukushima Sam
Fukushima Sam's picture

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

Tue, 05/29/2012 - 16:37 | 2473304 spastic_colon
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

Tue, 05/29/2012 - 16:59 | 2473376 mayhem_korner
mayhem_korner's picture

 

 

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

Tue, 05/29/2012 - 17:04 | 2473392 catacl1sm
catacl1sm's picture

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

Tue, 05/29/2012 - 16:33 | 2473308 JailBank
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.

Tue, 05/29/2012 - 17:31 | 2473486 ihedgemyhedges
ihedgemyhedges's picture

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

Tue, 05/29/2012 - 20:03 | 2473780 azzhatter
azzhatter's picture

Get a job at secret service

Tue, 05/29/2012 - 16:36 | 2473320 eclectic syncretist
eclectic syncretist's picture

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

Tue, 05/29/2012 - 16:56 | 2473367 Debt-Is-Not-Money
Debt-Is-Not-Money's picture

RIMM-Shot!

Tue, 05/29/2012 - 16:25 | 2473276 fightthepower
fightthepower's picture

Fuck you Bernanke!

Tue, 05/29/2012 - 16:25 | 2473277 GolfHatesMe
GolfHatesMe's picture

FACE-RIMM

Tue, 05/29/2012 - 16:59 | 2473375 ihedgemyhedges
ihedgemyhedges's picture

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

Tue, 05/29/2012 - 21:45 | 2473504 LouisDega
LouisDega's picture

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

Tue, 05/29/2012 - 16:28 | 2473284 FXPortent
FXPortent's picture

BBM on iPhone?

Croos-Platform BBMing?

 

 

End of the road for RIMM.

Tue, 05/29/2012 - 16:28 | 2473285 Satan
Satan's picture

Blackburied.

Tue, 05/29/2012 - 16:29 | 2473286 spastic_colon
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

Tue, 05/29/2012 - 16:28 | 2473288 Elwood P Suggins
Elwood P Suggins's picture

What is a "heacut:?

Tue, 05/29/2012 - 16:32 | 2473306 Agent P
Agent P's picture

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

Tue, 05/29/2012 - 16:29 | 2473291 optimator
optimator's picture

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

Tue, 05/29/2012 - 16:29 | 2473294 Rastamon
Rastamon's picture

 

 

 

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

Tue, 05/29/2012 - 16:31 | 2473303 malek
malek's picture

Karl Denninger will have a field day

Tue, 05/29/2012 - 16:37 | 2473323 eclectic syncretist
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.

Tue, 05/29/2012 - 16:38 | 2473325 junkyardjack
junkyardjack's picture

lol what options...

Tue, 05/29/2012 - 16:38 | 2473326 Jumbotron
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.

Tue, 05/29/2012 - 17:06 | 2473398 catacl1sm
catacl1sm's picture

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

Tue, 05/29/2012 - 19:36 | 2473739 Poundsand
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....

 

Wed, 05/30/2012 - 04:45 | 2474444 Sokhmate
Sokhmate's picture

enjoy your blackberries, while RIMM eats their dingleberries.

Tue, 05/29/2012 - 16:39 | 2473328 LeBalance
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!)

Tue, 05/29/2012 - 16:41 | 2473334 Seasmoke
Seasmoke's picture

And I was just going to buy that Blackberry tablet

/Sarcasm

Tue, 05/29/2012 - 16:55 | 2473363 bullmarket
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

 

Tue, 05/29/2012 - 16:43 | 2473338 Stackers
Stackers's picture

RIMM got iPWND

Tue, 05/29/2012 - 16:50 | 2473353 junkyardjack
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...

Tue, 05/29/2012 - 16:53 | 2473359 Tsar Pointless
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.

Tue, 05/29/2012 - 16:47 | 2473345 surf0766
surf0766's picture

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

Tue, 05/29/2012 - 17:01 | 2473380 Conman
Conman's picture

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

Tue, 05/29/2012 - 17:07 | 2473402 BankruptBanker
BankruptBanker's picture

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

Tue, 05/29/2012 - 17:09 | 2473410 walküre
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.

Tue, 05/29/2012 - 18:00 | 2473550 walküre
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.

Tue, 05/29/2012 - 23:33 | 2474134 palmereldritch
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.

Tue, 05/29/2012 - 17:21 | 2473456 nodhannum
nodhannum's picture

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

Tue, 05/29/2012 - 20:06 | 2473786 azzhatter
azzhatter's picture

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

Tue, 05/29/2012 - 17:23 | 2473462 soopy
soopy's picture

FaceBerged and RIMMjobbed in the same day! BAM!

Tue, 05/29/2012 - 17:24 | 2473465 Crabshack
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.

 

Tue, 05/29/2012 - 17:31 | 2473484 NO_MAN
NO_MAN's picture

"A Canadian won't spend $1 to make $1,000, but an American will spend $1,000 to make $1"

Arrogant and self-righteous fucking Canadians.... While the two owners were out trying to buy hockey teams in Nashville and build $30M estates outside of Waterloo, Rome was burning. These guys couldn't even find the word "innovation" in the dictionary if their life depended on it. So goes RIMM and the rest of Ontario with it....

May I recommend some fun summer reading for the two ex-chairmans Lazaridis and Balsille (WTF?! Two chairmans?! That alone should have opened a few eyes...)? How about: "Why Mexicans Don't Drink Molson" http://www.amazon.com/Why-Mexicans-Dont-Drink-Molson/dp/1553654064/ref=s...

 

Tue, 05/29/2012 - 17:46 | 2473520 Call me Ishmael
Call me Ishmael's picture

Bullish? What bearing does this have on whether the majority should sell or buy? Possible buyout is bullish. Possible bankruptcy is bearish. OK?
The statement seemed a little criptic.

Tue, 05/29/2012 - 17:52 | 2473532 q99x2
q99x2's picture

'JPM and RBC have been retained for "strategic purposes"'

You see that "JPM" that's what sunk it.

By contract investors aren't allowed to touch a stock once the dreaded "JPM" gets involved.

Tue, 05/29/2012 - 18:00 | 2473549 Call me Ishmael
Call me Ishmael's picture

Faced with buyout vs. bankruptcy the price is as unpredictable as anything right? I'm kind of new to this type of situation.

Tue, 05/29/2012 - 18:14 | 2473572 Sandmann
Sandmann's picture

Well at leasr BB has a better predictive text than Apple. I hate iPhone screwing up my messages. It really is crap that iPhone cannot text properly and for that alone I prefer to use my BB. That is forgetting the fact I have had 3 iPhones in 18 months under warranty, oh and as a telephone it is crap - but every reviewer thinks iPhone is a games console

Tue, 05/29/2012 - 18:24 | 2473610 navy62802
navy62802's picture

BOOM! Headshot.

Tue, 05/29/2012 - 18:29 | 2473623 Mark123
Mark123's picture

I heard a rumor that FB is going to buy GM and RIM and then build a vehicle powered by social networking juice.  RIM technology will be incorporated in the back-up video system....including some 99 cent apps so you can play games while you are backing up.

 

 

Tue, 05/29/2012 - 21:03 | 2473911 Snakeeyes
Snakeeyes's picture

Maybe RIMM and Facebook should join forces.

Tue, 05/29/2012 - 21:59 | 2473992 AN0NYM0US
AN0NYM0US's picture

Great idea, Mark could hire his sis Randi for the RIMM job

Tue, 05/29/2012 - 21:19 | 2473938 kuso
kuso's picture

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Tue, 05/29/2012 - 21:26 | 2473949 adr
adr's picture

RIM posted some design job openings online. Three weeks later almost the entire corporation is jumping ship. Managment must have been taking notes from Carly and Meg.

What you wait for is the stock to go to $.15 so you can retire when buyout rumors send the stock to $8 in one day.

Tue, 05/29/2012 - 21:30 | 2473953 bugs_
bugs_'s picture

Don't get nortel'd!

Tue, 05/29/2012 - 21:57 | 2473989 AN0NYM0US
AN0NYM0US's picture

RIMM today Apple tomorrow

 

(actually those aren't my words, some called me on my RAZR and to make the point  texted me on my PRE

Tue, 05/29/2012 - 23:40 | 2474140 thorgodofthunder
thorgodofthunder's picture

Google will buy it. They're neighbors in Waterloo and cultures would synergies. RIM could boost Moto also.

Watch.

Wed, 05/30/2012 - 01:03 | 2474258 Bartironomics
Bartironomics's picture

FailBerry

Wed, 05/30/2012 - 07:22 | 2474666 El_Puerco
El_Puerco's picture

JPMorgan Sold $25B in Securities to Mask Loss...Wow...Nice bank!..Good luck Rimm!!...

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