Research in Motion Stock Hit Despite Leadership Shakeup

NASDAQ: RIMMNew York, January 20th (TradersHuddle.com) – Waterloo, Ontario based Research In Motion (NASDAQ: RIMM) recently announced a leadership switch at the highest level as its joint Chief Executive Officers, Jim Balsillie and founder Mike Lazaridis, stepped down.

 

The team was replaced by Thorsten Heins, who was named as the Canadian telecommunication firm’s new President and CEO. According the company’s press release, Mr. Heins is a respected business leader who was formerly one of Research In Motion’s two Chief Operating Officers. 

 

The firm’s announcement also specified that Mr. Lazaridis will continue to participate actively in its management, taking on a new role as Vice Chairman of the Board, where he will lead the firm’s new Innovation Committee. Lazaridis will also provide strategic counsel and continue to help promote the company’s flagship BlackBerry brand on a global basis. 

 

The announcement came out yesterday, and while the initial pre-market response was favorable, the news has thus far failed to boost the company’s share price, which had fallen notably throughout 2011 from its 52 week high of $70.54 to a recent low of $12.45 seen on December 20th of last year.

 

By mid-day today, RIM’s stock was trading only modestly above that low point at $15.9095, after having fallen precipitously at the opening bell. Overall, the stock was down -1.095 thus far on the day to show a -6.41% loss in higher than average NASDAQ trading.

 

Flat Market Share and Falling Prices for BlackBerrys Take Their Toll

 

After its founding in 1984, Research In Motion helped move mobile communications substantially forward by introducing its key BlackBerry smartphone product in 1999 that allowed mobile phone users to rapidly send and receive electronic mail. In the second quarter of 2011, the company then released its BlackBerry PlayBook tablet computer.

 

Nevertheless, in recent years, the Canadian company’s flagship BlackBerry product has experienced substantial competition from the Apple iPhone and Android devices. Mobile phone market share growth for BlackBerrys flattened out in 2009 around the 3 percent level, as the product’s pricing then began a notable decline. Also, a three day communications blackout in October of 2011 hurt the company’s reputation for reliability with its affected users based in North America, Europe, the Middle East and Africa.

 

As December 2011 was drawing to a close, rumors started spreading that the firm was looking to sell some or even all of its business to another company, with suitors such as Microsoft, Nokia and Samsung being popularly mentioned.  

 

The Technical Picture for RIMM Looks Supportive After Year Long Decline

 

From a technical perspective, RIMM’s share price has shown a regular long term downwards trend that continued throughout most of 2011.

NASDAQ: RIMM 

Figure 1: A daily close line chart of the stock price of Research In Motion (RIM) over a one year period.

Nevertheless, the price recently made a significant low in the $12.45 region in late December of 2011, and it has since been reversing correctively to the upside, even breaking through declining trendline resistance.  That level should now provide good support, with resistance noted at $24.60 and $32.94.

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