May 30, 2012 / 7:22 am
Shares of BlackBerry-maker Research In Motion (TSX:RIM) fell nearly nine per cent Wednesday in the first trading session since the company announced it expects significant layoffs and an operating loss due to weak sales.
The Waterloo, Ont.-based company's stock was off $1.03 shortly after open, falling to $10.45 on the Toronto Stock Exchange.
RIM said after market close Tuesday that it has hired two outside firms to advise on its troubled business and financial performance.
There have been suggestions, including from some of RIM's shareholders, that RIM could separate operations that make the BlackBerry handhelds and PlayBook tablets from the operations responsible for networks and intellectual property.
Another possibility would be a more focused approach on fewer product lines, with greater emphasis on the business and government sectors and less on consumer-oriented devices that compete with Apple, Samsung and others.
The announcement sparked a new round of suggestions from analysts that RIM's future is particularly uncertain.
Wedbush Securities analyst Scott Sutherland says his firm lowered its price target for RIM shares by $2 to US$11.50 because it appears there is minimal demand for RIM products ahead of the new BlackBerry 10 devices.
"While we believe the currently strategy could cause RIM to go the way of Palm, we see value in the parts and thus see risks to being overly negative at current levels," Sutherland says in a research note released Wednesday.
National Bank analyst Kris Thompson said in a note titled "RIM Blows Up in Q1, Recovery Unlikely" that he considers the company up for sale.
"While buying this stock is like going to the casino, RIM does have over $4 per share of cash and intellectual property with a book value of about $6.00 per share," he noted.
"If you're feeling lucky, this stock might be worth a dice-roll under $10 per share. We'd still avoid on fundamentals."
RIM chief executive Thorsten Heins said Tuesday that there will be an unspecified number of jobs cut as the company aims to cut $1 billion in costs.
Reports have suggested RIM will cut 2,000 to 5,000 jobs.
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