Too Late for Comeback, RIM Needs to ‘Salvage Value’: Analyst

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Research In Motionwas a $60 dollar stock this time last year — what a difference a year in telecom makes. The stock was hovering around $13 a share on Tuesday.

RIM’s drop has been so dramatic, analyst Mark McKechnie of ThinkEquity says it’s likely too late for a comeback.

In the past year,Apple has gained 58.20 percent in share price, while RIM lost 78.94 percent.

“The clock is ticking. Every day that goes by, they’ll be displaced in the U.S. by other solutions,” he said, after having slashed RIM’s price target from $18 to $12 a share.

Other “solutions” are increasingly popular smartphones that run on Google’s Android operating system.

There are, however, no signs that RIM is adapting its products to either support or compete with Android phones.

“I’ve been saying, if you can’t beat ’em, join ’em," said McKechnie, “So I was disappointed when new management team took over and tried to stay-the-course with their existing product line.”

On the other hand, McKechnie concedes there is remaining value in RIM, with its $7 billion market cap— and that needs to be salvaged.

“It’s a special situation stock. They’re still seeing some growth internationally, and they’ve got patents worth $10 per share,” he said.

At this point, the company may still gain market share in emerging markets, where the Blackberry phone is relatively inexpensive.

That said, McKechnie is not optimistic: “RIM had a great lead, but the industry is catching up.”

Additional News: Greenlight Capital Buys Into RIM
Additional Views: RIM’s Woes Worse Than Market Realizes


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Mark McKechnie does not own shares of RIMM, nor does his firm, ThinkEquity.