RIM stock to be closely watched after co-CEOs resign

RIM stock to be closely watched after co-CEOs resign

Co-chief executive Mike Lazaridis, left, and co-chief executive Jim Balsillie at the Research in Motion annual meeting in Waterloo, Ontario, Tuessday, July 12, 2011. (Dave Chidley / THE CANADIAN PRESS)

TORONTO — BlackBerry maker Research in Motion's (TSX:RIM) stock will be closely watched when markets open this morning as investors react to the departure of longtime co-CEOs Jim Balsillie and Mike Lazaridis.
RIM announced late Sunday the pair would be replaced by little-known chief operating officer Thorsten Heins, who will be tasked with pulling the troubled company out of a big slump.
Once one of the country's most valuable companies, RIM has seen its fortunes plunge over the last few years as it lost market share to competitors Apple and Google's Android platform, saw disappointing sales of its PlayBook tablet and suffered though a global four-day service outage.
A key task facing the German-born Heins will be to assuage a host of less-than optimistic shareholders disgruntled by RIM's slipping performance and several glitches and setbacks.
A number of RIM's shareholders have demanded changes at the top for months, blaming Balsillie and Lazaridis for several years of poor performance.
Shares in RIM were once so highly priced it was briefly Canada's most valuable company, worth more than $70 billion, but it's market capitalization is now around $9 billion.
While Balsillie and Lazaridis have left day-to-day operations, they both still remain on RIM's board and will have significant influence through their large ownership stakes.
RIM introduced the BlackBerry in 1998 and it quickly elevated the company to the upper echelons of the smartphone market.
But in early 2011, RIM's PlayBook -- its answer to Apple's hugely successful iPad -- left critics largely unimpressed. From then on, the news for RIM was mostly bad.
The company then announced it would take a US$485-million pre-tax charge on the cost of discounting the price of its PlayBook tablet and $50 million in lost revenues from an October service outage that affected millions of BlackBerry email and text users. It was forced to cut 2,000 jobs to keep costs in line.
In December, RIM reported third-quarter net profits of US$265 million, well below the $911 million for the same period a year before.
The Waterloo, Ont., company saw its stock market value fall from about $50 billion at the beginning of 2011 to about $7.6 billion by year's end. Shares hit a low of $12.80 in 2011. They had hit a high of almost $140 in 2008.