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Could billionaire activist investor Carl Icahn be the answer to Research In Motion’s woes?
Wall Street apparently thinks so, as RIM’s stock rose nearly 7 percent today on speculation that Icahn may have taken a stake in the company, BGC Partners analyst Colin Gillis, citing traders, told Reuters today.
“We believe that, if true, this would be viewed positively, as it could lead to changes in the company to potentially unlock value,” said James Moorman, an equity analyst at Standard & Poor’s.
Icahn has a track record of taking major stakes and agitating for change in ailing companies, calling for new board members, a change in leadership, and even a break-up of the company or the sale of assets–anything to increase shareholder value. And he has a track record of getting what he wants.
Icahn couldn’t immediately be reached for comment by CNET.
If Icahn were interested in RIM, he would be buying shares in the company at their lowest value in years. The stock hit a five-year low of just less than $22 a share on Friday. It has been battered–having lost roughly two-third of its market value over the past seven months–on concerns that RIM’s BlackBerry smartphones were no longer able to compete in a market where Android smartphones and Apple’s iPhone dominate.
To make matters worse, RIM’s PlayBook tablet, the first device to use its next-generation operating system, flopped early, taking recent discounts to drive sales.
RIM’s situation echoes that of Motorola, where Icahn first disclosed a stake in the company in early 2007, later orchestrating the ouster of its CEO, Ed Zander, and choosing two people to serve on the board. He helped Motorola’s decision to split into two businesses: Motorola Solutions, which makes public-safety radios and enterprise computing devices, and Motorola Mobility, the handset business that Google agreed to buy for $12.5 billion.
But RIM’s situation is different, as the two largest shareholders of the company are co-CEOs Jim Balsillie and Mike Lazaridis. In this case, Icahn would face significantly more entrenched resistance to change.
