Jim Balsillie and Mike Lazaridis, Research In Motion Ltd (RIMM)’s largest shareholders and co-chief executive officers, have lost their status as billionaires from the stock this year as it has shed more than half its value.
The executives, who each own about five per cent of the BlackBerry maker, had the value of their stakes drop to about $640 million yesterday from about $1.9 billion in February.
RIM’s earnings reports have disappointed investors for three consecutive quarters as the company struggles to gain ground from Apple Inc (AAPL)’s iPhone and iPad. Waterloo, Ontario- based RIM missed analysts’ estimates September 15 for profit and shipments of the Blackberry and PlayBook tablet computer.
“These guys have misexecuted,” said Matthew Thornton, an analyst for Avian Securities LLC in Boston. “They have been very late with the new products. They’ve missed their own forecasts. They’ve done nothing to reassure Wall Street that they’re going to get more competitive against Apple and Google’s Android products.”
RIM fell 19 per cent to $23.93 on the Nasdaq Stock Market at 4 pm New York time yesterday, down 66 per cent from a 2011 peak and 84 per cent from its record in June 2008.
The plunge in RIM’s stock price this year marks a reversal in the fortunes of a company that dominated the US smartphone market after introducing the BlackBerry in 1999. The stock rose more than 70-fold between 1999, when it began trading on the Nasdaq, and its 2008 peak.
Lazaridis founded RIM in 1984 when he was a senior at the University of Waterloo in Canada. The company began working on wireless products three years later, developing a pager that evolved into what is known as the BlackBerry. Balsillie, a 1989 graduate of Harvard Business School, joined RIM in 1992.
The company’s smartphone market share started eroding after Apple introduced the iPhone in 2007 and phones running Google Inc (GOOG)’s Android software gained popularity. In the second quarter, RIM’s share of the global smartphone market dropped to 12 per cent from 19 per cent a year earlier, according to Gartner Inc. In the same period, Apple climbed to 18 per cent from 14 per cent, and Google’s Android rose to 43 per cent.
This month, investor Jaguar Financial Corp asked RIM to consider selling itself or spinning off its patents to boost investor returns.
“Given Saturday’s stock action, you’ll get more activists going in and seeing what’s the strategic direction, and does it make sense,”, Jeff Fidacaro, an analyst at Susquehanna International Group in New York, said yesterday in a telephone interview. “Everything is on the table.”