RIM Gains on Speculation Drop Caused by New CEO Was Overdone
Research In Motion Ltd. (RIM), maker of the BlackBerry smartphone, advanced after three days of declines as some investors speculated the drop caused by the appointment of a new chief executive officer was overdone.
RIM gained 8.6 percent to $16.30 at the close in New York. Before today, it had lost 12 percent since RIM on Jan. 22 replaced co-Chief Executive Officers Jim Balsillie and Mike Lazaridis with Thorsten Heins, who had been operating chief.
“You have potentially some overreaction about the new CEO and the new management team,” Mark McKechnie, an analyst with ThinkEquity LLC, said in an interview.
RIM shares fell earlier in the week after Heins said he sees no need for a “drastic change” at the Waterloo, Ontario- based company. Balsillie and Lazaridis had come under criticism as Apple Inc. (AAPL) and Google Inc. (GOOG) pulled ahead in U.S. smartphone sales, a market RIM once dominated.
RIM shares have lost more than 70 percent in the past 12 months, potentially attracting investors who see it as undervalued, Shaw Wu, an analyst at Sterne Agee & Leach Inc., said in an interview.
“It could be value folks coming in here,” he said. “Keep in mind, the stock’s been under pressure the last couple of days.”
McKechnie also cited speculation that RIM may be a takeover target. Such speculation drove the company’s stock to one-day gains of at least 5 percent more than 10 times since the beginning of August. RIM didn’t put itself up for sale or consider a sale, a person familiar with the matter said this month.
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