Jaguar Financial Corporation, a Canadian merchant bank that owns shares in Research in Motion, on Tuesday called on the struggling manufacturer of BlackBerry devices to explore its strategic options, including a potential sale of the company or by spinning off its patent portfolio.
With RIM’s stock price just a fraction of its value three years ago, Toronto-based Jaguar said now is the time for the board to act. RIM’s stock price has fallen about 80 percent over the last three years, plummeting from $149.90 in June 2008 to $29.59 on Sept. 2, according to Jaguar, which noted other shareholders also support its recommendations.
“It is time for transformational change," Jaguar CEO and Chairman Vic Alboini said in a statement. “The Directors need to seize the reins to maximize shareholder value before more market value is lost."
Jaguar has recommended that RIM’s board of directors appoint a special committee “to pursue a shareholder value maximization process."
The merchant bank implied that RIM could maximize value for investors through the spin off of its impressive patent portfolio at a time when intellectual property is driving huge acquisitions in the global communications market, such as Nortel Networks’ $4.5 billion sale of its remaining patents and patent applications to a consortium that included RIM and its rival Apple among others.
“With its stock of coveted patents, RIM is positioned to benefit from the increased appetite for intellectual property, but the Board must change course and recognize the opportunity," Jaguar said in a press release.
Alboini told The Wall Street Journal that Jaguar and other shareholders it is working with own less than five percent of RIM’s shares.
The pressure from a relatively small shareholder like Jaguar reflects RIM’s continuing struggles and investors’ weariness with the company’s management, but it might not be sufficient to cause RIM to rethink its strategy.
Jaguar has “had some success with small, cash-rich companies, but won’t be able to change RIM," Peter Hodson, a portfolio manager at Sprott Asset Management LP, told the Journal.
