Ironfire Capital’s Eric Jackson says he still has reservations about Research in Motion, but is no longer shorting the stock because he thinks the company’s new BlackBerry 10 platform could represent new market opportunities. During the time shares of Research in Motion fell from nearly $150 in 2008 to current levels near $7, observers generally fell into two camps; those who unabashedly supported the Waterloo device maker, and those who bashed it.
Ironfire Capital’s Eric Jackson would, for much of the past five years, have fallen into the latter group. Jackson, who is a regular contributor to Forbes, where he has documented RIM’s demise, began shorting the stock when it was more than $50, and has never held a long position.
Today, however, he says the negativity about RIM may be overdone. Appearing on BNN with host Marty Cej during the network’s coverage of RIM’s annual general meeting, Jackson says he is now thinking about buying shares of the BlackBerry maker.
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On a day when RIM shareholders, in a lecture hall on the campus of Wilfred Laurier University in Waterloo, mocked the board for not addressing its competitive position earlier, Jackson said RIM would be better served to adopt a strategy that pursues licensing opportunities for its upcoming BlackBerry 10 platform, rather than try and engage in a device war.
Jackson says he is still worried by the leadership of new RIM CEO Thorsten Heins, describing him as “one of the worst communicating CEOs” he has ever seen. “Heins has said some boneheaded things” he says, offering that a “series of comical catchphrases” has provided fuel for those mocking RIM’s demise. Jackson, critiquing Heins first six months at the head of RIM, pointed out that even people he had talked to who were working on BlackBerry 10 didn’t know why the operating system was delayed. “Either Heins is stupid” he says, “or he was kept in the dark.”
Still, says Jackson, RIM’s cash position is strong and should easily bring it to the BlackBerry 10 release where there is a real market opportunity for the new RIM platform to power a range of smart devices. This strategy, he says, would have RIM play in a place where it could be “unchallenged” and is something he considers much more attractive for RIM shareholders than competing against iPhones and Android devices.
Jackson says he will be watching RIM carefully as the BlackBerry 10 release, which is expected in January, nears. Until then, he says, those buying RIM might have to suffer through Q2 numbers that could be awful. He suggests waiting until this bad news is out of the way before tying up capital that could be better served in places other than RIM stock.
Click here for the full interview.
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View Comments
I want to believe you, I really do. The company is betting the farm on BlackBerry 10 being the thing that will bring in the lost flock of customers, and it might be the best OS the wireless industry has ever seen.
But the company has been waiting and hoping ever since the project was announced, over a year ago. The issue is that there is a serious lack of commitment to the current line of RIM devices because they are waiting for this next big thing, and additional delays allow their competition to steal additional customers; and in the world of wireless, those customers are locked into long term agreements, making it extremely hard for them to get a new BB when it comes out (whenever that may be). A January release will be extremely unwise: RIM will be waiting until after the holiday rush, when Google, Apple, Microsoft and now Amazon are all going to be pushing out new devices in their own attempts to recreate Apple's epic Q4 2011 performance, and almost all of those customer will be unable to purchase again for 18+ months. Compound that with the fact that it is highly unlikely that RIM will add backward compatibility of the new operating system to current under-performing devices to ensure current BB customer stay loyal to the brand, and RIM is going to get a resounding splat when the time comes to cash in on the year(s) of patient waiting.