A small Canadian activist investor is calling on the board of Research in Motion to explore options to increase the company’s share price, including a potential sale or spinoff of its patent portfolio.
In a letter to the board, Vic Albioni, head of merchant bank Jaguar Financial, criticised RIM’s lack of innovation and challenged its governance structure, in the latest complaint from investors taking the company to task for its poor performance.
“The status quo is not acceptable, the company cannot sit still,” Albioni, chairman and chief executive of Jaguar, said in a statement. “It is time for transformational change. The directors need to seize the reins to maximise shareholder value before more market value is lost.”
It is unclear how many RIM shares Jaguar owns. The firm is relatively small, with reported net income of $2.1 million for the second quarter of 2011, and RIM, with a market value of about $15.8 billion, is by far its largest target to date.
But Research in Motion’s share price has been battered this year, falling nearly 50 per cent. The company, which has two chief executives who also serve as chairmen of the board, has already been confronted by one investor about its governance structure.
Northwest and Ethical Investments dropped the proposal to split the chairman and chief executive roles from the summer investor meeting after RIM promised to form a committee to study its leadership structure.
In the letter, Jaguar said RIM had lost significant market share in the last year, as the Apple iPhone and phones using Android, the operating system created by Google, have claimed new customers in the smartphone market. A number of product introductions, including a tablet, have not been the successes the company had hoped for.
“This decline in the company’s standing can largely be attributed to significant execution delays, inadequate mobile applications and the lack of a competitive product that addresses the needs of the consumer marketplace,” the letter from Jaguar said.
©2011 The New York
Times News Service
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