After months of increasingly aggressive shareholder activism, the long-standing co-CEOs (Balisillie and Lazaridis) of the struggling Blackberry maker have resigned as the former COO takes over as CEO and former-exchange executive takes over as chairperson.
- RESEARCH IN MOTION CO-CEOS/CHAIRMEN QUIT POSTS - BBG
- RIM NAMES BARBARA STYMIEST INDEPENDENT BOARD CHAIRMAN - BBG
- RESEARCH IN MOTION NAMES THORSTEN HEINS PRESIDENT, CEO - BBG
Research In Motion has clearly morphed into Activism-in-Motion as the Globe and Mail [7]reports: "The catalyst for change appears to have been the entry of a new personality: reserved but revered investor Prem Watsa, the CEO of Fairfax Financial. Mr. Watsa, who has been called Canada’s Warren Buffett." While chatter appears to be that change-is-good, G&M go on to note, "Critics of the company’s performance may not be immediately impressed by
a management shakeup that involves so little fresh blood." as the Playbook fiasco is fresh in many people's minds but perhaps new CEO's Heins view that "We are not at a point where we try to define a strategy, that’s done" will not hearten those looking for real change.
The Globe And Mail - Jim Balsillie, Mike Lazaridis out, Thorsten Heins in as new RIM CEO [7]
Research in Motion leaders Jim Balsillie and Mike Lazaridis are stepping down as executives and co-chairmen of the board of directors in the the biggest shake-up in the 27-year history of the Waterloo, Ont.-based startup turned global giant. The sudden move follows a year of decline in which RIM lost three-quarters of its market value, botched the launch of its PlayBook tablet and watched rivals eat into its market share for smartphones.
The new chief executive of RIM will be Thorsten Heins – a man they recruited five years ago who came to be a trusted advisor and their hand-picked successor. Calls for radical change at the company have been mounting in recent months. Its BlackBerry device blazed the trail for smartphones and has 75 million active subscribers around the world, but RIM has struggled of late with dwindling market share and fierce competition from Apple Inc.’s iPhone and an array of devices running Google Inc.’s Android operating system.
The catalyst for change appears to have been the entry of a new personality: reserved but revered investor Prem Watsa, the CEO of Fairfax Financial. Mr. Watsa, who has been called Canada’s Warren Buffett for his business acumen, has been quietly buying RIM stock for some time. Fairfax is now one of RIM’s largest shareholders, and Mr. Watsa is being appointed as a director to the company’s board after playing a role in key discussions in recent weeks.
Critics of the company’s performance may not be immediately impressed by a management shakeup that involves so little fresh blood. Mr. Heins is simply moving up the ranks, while newly appointed board chair Barbara Stymiest has been a director since 2007. But RIM’s new leadership – including Mr. Watsa, Mr. Heins and Ms. Stymiest – suggested in interviews with The Globe and Mail on Sunday that they are content with the company’s strategic direction and products, and will not seek major changes.
“There’s no need for me to shake this company up or turn it upside down,” Mr. Heins said at RIM’s Waterloo headquarters. “We are not at a point where we try to define a strategy, that’s done.”
Mr. Balsillie and Mr. Lazaridis have been grooming Mr. Heins as a successor for some time now, and say they decided to act as the company enters a new phase: RIM’s newest BlackBerry 7 devices are now out in the market, its PlayBook tablet is receiving a software revamp in February and its next-generation operating system – BlackBerry 10, which is meant to save the company – launching later this year.
“Jim and I approached the board and we told them that the time is now,” Mr. Lazaridis said.
Lazaridis said he plans to buy an additional $50 million of RIM shares on the open market
What will be RIM's near-term strategy?
In the longer term, Heins, previously one of RIM's chief operating officers, said he would push for more rigorous product development and place greater emphasis on executing the company's marketing plan and reaching out to customers.
He said RIM, which suffered a damaging outage of much of its network last year, has embarked on a global search for a chief marketing officer to improve advertising and other communication with consumers. Consumers now account for the majority of RIM's sales even though the BlackBerry built its reputation as a business tool.
For RIM critics, the focus on customers may seem long overdue. The company seemed blindsided by Apple's introduction of the iPhone in 2007 and was also slow to launch a competitor to the iPad. When its PlayBook tablet finally hit the market last spring, it was not equipped with RIM's trademark email service. The reviews were scathing, sales were anemic and the company has been forced to offer steep discounts.
Heins said it would be wrong of RIM to focus on licensing its software or integrated email package, a strategy that many analysts and investors have thought the company might pursue. Even so, the new CEO said the company would certainly be open to discussions of that nature.
With RIM's share price plummeting to eight-year lows, a flurry of speculation has bubbled to the surface in recent months that RIM was up for sale. Lazaridis and Balsillie were seen a major obstacles to any deal.
More from Reuters, with the instant analysts reactions:
EDWARD SNYDER, ANALYST AT CHARTER EQUITY RESEARCH
"It's the first positive thing that they have done in months. It's a step in the right direction.
"With them (Laziridis and Balsillie) still in the game, is their strategy going to continue with the new CEO? Is it a change in direction, or is it a move to the shareholders and investors off their backs? Is it a real change, or is it window-dressing?
"It sounds like it might be a first good step, but ... I have my doubts. My feeling is that it's a figure-head change.
"The stock will probably rally a bit."
MICHAEL URLOCKER, ANALYST AT GMP SECURITIES IN TORONTO
"I am not sure that an engineer as new CEO really gets to the central issues faced by RIM."
Sounds like the light for the activist investors to get really involved in RIMM is now flashing green. Look for those 13Gs filings any minute now.