RIM Tries to Reassure Investors at Annual Meeting
Research In Motion Ltd. (RIM), seeking to reassure shareholders at their annual meeting today, reiterated that it’s considering all strategic options for the company, even as it pushes for a January release of the BlackBerry 10.
“We’re doing all our homework to understand what our options are,” Chairwoman Barbara Stymiest told reporters at the event in Waterloo, Ontario. “We are doing this in parallel with delivering on BB10. Whatever happens will be the best of the available options at the time.”
RIM faced combative questions today from shareholders, who have seen the stock lose about 95 percent of its value since peaking in 2008. In a packed auditorium, investors criticized everything from Chief Executive Officer Thorsten Heins’s million-dollar salary to the board’s lack of diversity to technical glitches with the existing BlackBerry technology.
Vic Alboini, chairman of the Toronto-based investment firm Jaguar Financial Corp., served as the company’s most vocal critic, standing up twice to ask questions. He has called for the company to be sold or broken up, and said today he was disappointed not to hear about those possibilities. He has cited Microsoft Corp. or International Business Machines Corp. as potential buyers.
Alboini also called for changes to the board, which he views as too insular. Shareholders did elect one new director today, TPG Capital LP executive Timothy Dattels -- an addition Alboini called “a step in the right direction.”
“What this board is missing is more technologically savvy expertise, marketing expertise and a little more transaction expertise,” said Alboini, who declines to say how much RIM stock he owns. “This is too cozy and clubby a board.”
RIM said last month that it would seek one or more directors this year, and Stymiest said today that the company has a search firm working to recruit board members. Four of RIM’s 10 directors have joined in the past year, she said.
“That’s a huge amount of change,” Stymiest said.
The meeting was held at an auditorium at Wilfrid Laurier University, near RIM’s headquarters. Only water was served at the event, which one investor during the meeting lauded as a cost-cutting move.
Even so, the meeting did little to placate shareholders. RIM’s stock fell 5 percent to $7.29 in New York, following a decline of 5.3 percent yesterday. The shares have lost half their value since the start of the year.
RIM has failed to keep up with Apple Inc. (AAPL) and Google Inc. (GOOG), and the release of the BlackBerry 10 operating system -- a linchpin of its comeback plan -- has been delayed twice. RIM last month reported a first-quarter loss excluding restructuring expenses that was more than five times bigger than what analysts had predicted. Sales tumbled 43 percent to $2.8 billion, and the company said it would cut 5,000 jobs -- about a third of its workforce.
“I want to assure you I am not satisfied with the performance of the company over the past year,” Heins said at the meeting. “We are working around the clock to successfully complete the transition path that we are on.”
RIM’s share of the global smartphone industry fell by more than half to 6.4 percent in the first quarter, according to research firm IDC. Google’s Android jumped to 59 percent, while Apple accounted for 23 percent.
Shareholders approved all of RIM’s directors and a nonbinding say-on-pay measure that the board had supported. Still, some investors withheld votes for the directors -- a sign of dissent, Alboini said. Almost 15 percent of votes for Heins were withheld. The amount was 19.1 percent for Mike Lazaridis, RIM’s previous co-CEO.
The company also said today that it was aiming to release its first BlackBerry 10 phones in January, giving a more specific time frame than its previous goal of the first quarter.
“My expectation is that in some countries we will be launching in January,” Frank Boulben, RIM’s new chief marketing officer, said in an interview before the meeting. “Will it be three continents or five, five countries or 10? I don’t know the specifics yet, but it will be multiple countries on multiple continents.”
Boulben, who was hired for RIM’s top marketing job in May, said that releasing the phone in January and not in the run-up to the holiday shopping season means RIM won’t have to compete with a flood of new handsets. Apple and other rivals are expected to release new models later this year.
Still, Boulben said he couldn’t guarantee the January timing for the first phone because wireless carriers’ testing of the device could run late.
“The testing process of our carrier partners can take up to eight, 10, 12 weeks,” said Boulben, a former executive at French carrier Orange SA. “So we are also dependent on them.”
The company said last month that the first BB10 phone wouldn’t be released until first quarter of 2013, an announcement that sent the shares tumbling. At the time, RIM wasn’t more specific.
The company doesn’t want to release the software before it’s ready, Heins said today.
“BB10 is not just another OS -- it’s a whole new mobile computing platform,” he said.
To contact the editor responsible for this story: Nick Turner at firstname.lastname@example.org
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.