Investors took Research In Motion Ltd. shares to the woodshed Friday, driving the stock down as much as 20 per cent after the company reported a big loss and said it would delay rollout of a new generation of smartphones.
RIM traded $1.71 (U.S.) lower at $7.42 on heavy volume on the NASDAQ midday amid a slew of analyst downgrades and renewed pressure on the company to sell assets or seek a takeover offer from companies including Microsoft, Samsung and Nokia.
More than 62 million RIM shares changed hands on the tech-weighted Nasdaq index compared to a 50-day average volume of 17 million. It closed down $1.74 at $7.39 (U.S.).
The stock was down $1.90 (Canadian) or 20 per cent at $7.56 on the Toronto Stock Exchange on more than six times average daily volume. It closed in Toronto at $7.54, down $1.87.
Analysts’ average 12 month price target from RIM stock is $8.18 (U.S.) with Jefferies’ Peter Misek targeting the shares at $5. At least three brokers downgraded the stock to sell but Canadian brokerages GMP Securities and National Bank bucked the trend, upgrading RIM on the prospect of increased value due to a break up or sale.
The shares are at a fresh 52-week low, well below the market value of the company’s assets, after several analysts cut their price targets in half. But GMP said the Waterloo-based company, despite its travails, may be inexpensive enough to attract buyout interest.
A year ago RIM shares were valued just above $30 and the company had a market worth of about $14 billion compared to less than $4 billion today.
Misek slashed his target price for RIM shares to $5 and said the delay was a disaster for the beleaguered company, which had been counting on BB10 to boost its market share. Some analysts have said RIM’s share of the world smartphone market is likely to sink below 5 per cent this year.
“The delay in BB10 is absolutely catastrophic. It was all their hopes and dreams, and now they’re going to miss Christmas. An absolute catastrophe,” Misek said in an interview.
Even assuming BB10 does eventually get released, there’s no guarantee it will catch on with consumers, said Shaw Wu of Sterne Agee.
“The company seems to be betting everything on BB10 and assuming that it will be an instant hit. It might not be. Even if it’s well executed and a good system, consumers just might not like it,” said Wu. “It’s not about BB10 any more. It’s about survival.”
More on the Web: RIM’s choice: revamp standalone strategy or disappear
More on the Web: RIM reports $518 million loss, 5,000 job cuts, delay of BB10 to 2013
More on the Web: BlackBerry maker’s need for revenue heats up
RIM traded $1.71 (U.S.) lower at $7.42 on heavy volume on the NASDAQ midday amid a slew of analyst downgrades and renewed pressure on the company to sell assets or seek a takeover offer from companies including Microsoft, Samsung and Nokia.
More than 62 million RIM shares changed hands on the tech-weighted Nasdaq index compared to a 50-day average volume of 17 million. It closed down $1.74 at $7.39 (U.S.).
The stock was down $1.90 (Canadian) or 20 per cent at $7.56 on the Toronto Stock Exchange on more than six times average daily volume. It closed in Toronto at $7.54, down $1.87.
Analysts’ average 12 month price target from RIM stock is $8.18 (U.S.) with Jefferies’ Peter Misek targeting the shares at $5. At least three brokers downgraded the stock to sell but Canadian brokerages GMP Securities and National Bank bucked the trend, upgrading RIM on the prospect of increased value due to a break up or sale.
The shares are at a fresh 52-week low, well below the market value of the company’s assets, after several analysts cut their price targets in half. But GMP said the Waterloo-based company, despite its travails, may be inexpensive enough to attract buyout interest.
A year ago RIM shares were valued just above $30 and the company had a market worth of about $14 billion compared to less than $4 billion today.
Misek slashed his target price for RIM shares to $5 and said the delay was a disaster for the beleaguered company, which had been counting on BB10 to boost its market share. Some analysts have said RIM’s share of the world smartphone market is likely to sink below 5 per cent this year.
“The delay in BB10 is absolutely catastrophic. It was all their hopes and dreams, and now they’re going to miss Christmas. An absolute catastrophe,” Misek said in an interview.
Even assuming BB10 does eventually get released, there’s no guarantee it will catch on with consumers, said Shaw Wu of Sterne Agee.
“The company seems to be betting everything on BB10 and assuming that it will be an instant hit. It might not be. Even if it’s well executed and a good system, consumers just might not like it,” said Wu. “It’s not about BB10 any more. It’s about survival.”
More on the Web: RIM’s choice: revamp standalone strategy or disappear
More on the Web: RIM reports $518 million loss, 5,000 job cuts, delay of BB10 to 2013
More on the Web: BlackBerry maker’s need for revenue heats up
