If there's one thing that Research In Motion (Nasdaq: RIMM) needs, it's a knight in shining armor.
The rumor mill is buzzing today on speculation that activist investor and corporate raider Carl Icahn has taken a stake in the beleaguered BlackBerry maker. This is hearsay at its purest, since there is no official word from Icahn or RIM to either effect. Icahn Capital LP's most recent 13F filing shows no current position in RIM, so any stake would be a new addition to his portfolio.
The Canada-based company needs a wake-up call, and Icahn knows how to turn companies around. RIM needs some lessons in good corporate governance, especially after blowing aside shareholders' and employees' calls to action. Research In Motion has not been delivering on PlayBook sales; the only thing that the company is delivering is dismal earnings.
Retail partners like Office Depot (NYSE: ODP) and Staples (Nasdaq: SPLS) have begun lopping hundreds of dollars off PlayBook prices in an attempt to promote sales as hinted by RIM co-CEO Jim Balsillie on last quarter's conference call. Prospective PlayBook buyers can look for up to $200 in savings through a combination of "instant savings" and a mail-in rebate. The official retail price hasn't changed, and these promotions are expected to last through the holiday season. Although these discounts are technically temporary, so were Hewlett-Packard's (NYSE: HPQ) initial round of TouchPad sales, and we all know how that ended.
Shareholders are loving the idea of Icahn stepping in, sending Research In Motion shares up by as much as 7% as of this writing. It's worth noting that Icahn already has his hands in the mobile sector with a large stake in Motorola Mobility (NYSE: MMI), which he banked on last month with Google's (Nasdaq: GOOG) purchase after he pressed Motorola to look into options for its patents.
If any outsider is going to step in and engineer a turnaround for RIM, I can't think of a better candidate than Carl Icahn. If the company hopes to halt its slow-motion train wreck, it needs to act soon. In the meantime, we'll have to wait until Icahn Capital LP's next quarterly holdings disclosure to see whether this rumor has any legs.
- Add Research In Motion to My Watchlist.
- Add Staples to My Watchlist.
- Add Office Depot to My Watchlist.
- Add Motorola Mobility Holdings to My Watchlist.
- Add Hewlett-Packard to My Watchlist.
- Add Google to My Watchlist.
