Research In Motion Ltd. (RIMM)’s decline below book value for the first time in nine years leaves the BlackBerry maker worth less than the net value of its property, patents and other assets in a sign of investors’ lowered faith.
“This is a wounded puppy,” Timothy Ghriskey, who oversees $2 billion as chief investment officer of Solaris Group LLC in Bedford Hills, New York, said in an interview. “They’ve been losing business, there’ve been operating technology problems. There isn’t a lot of customer loyalty anymore.”
RIM declined 2 percent to $18.91 yesterday in New York, trailing the book value of $18.92 a share at the end of last quarter, according to data compiled by Bloomberg. The measure comprises a company’s assets including cash, inventories, real estate and intellectual property minus its liabilities.
The company helped create the smartphone market a decade ago with its first e-mail device and now must compete against Apple Inc. (AAPL) and devices that run Google Inc. (GOOG)’s Android software. The market-share decline has put pressure on RIM to shake up management, and investors such as Jaguar Financial Corp. (JFC) have called for RIM to divide split up, seek a merger or sell itself.
“The market, at book value, seems to be saying not only is RIM going to not get bigger in the future, but it’s actually going to shrink,” said Richard Fogler, of Kingwest & Co. in Toronto, who personally manages about C$1.5 billion. He sold his RIM shares in the third quarter. “Everyone’s frightened of what’s going to keep happening tomorrow.”
