It would seem the raft of new services and product offerings are either yet to bear fruit or have been pointless; because despite all its troubles, BlackBerry maker Research In Motion’s (RIM) shares have hit their worst levels since 2004.
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The clobbering RIM’s shares took were as a result of RIM finally admitting in an earnings outlook that sales of its much-maligned BlackBerry PlayBook tablet were not all that playful.
Despite constantly dropping the price of the tablet, RIM has attempted to downplay that there were any serious issues with sales.
The earnings outlook, however, showed the true story. As a result of weak sales of the PlayBook tablet, RIM stated that it would be cutting what it expected to earn in the third-quarter to US$485 million.
It seems this was the last straw for shareholders, many of whom had stuck with the company throughout its many woes including another earnings warning earlier this year. Several left the stock — which opened at US$18.58 per share — shedding almost 10% of its value and closing at US$16.77 per share.
Regardless of what the analysts and most importantly, the consumers, think, RIM has decidedly stated its intention to continue to make a play in the tablet market.
In the very same report that precipitated the sell-off, RIM — which a Wall Street Journal financial blogger referred to as being derived from the Canadian word for “falling stock price” — decided to “confirm commitment to [the] tablet market”.
“The company now believes that an increase in promotional activity is required to drive sell-through to end customers. This is due to several factors, including recent shifts in the competitive dynamics of the tablet market and a delay in the release of the PlayBook OS 2.0 software,” RIM stated.
Ever the optimist, RIM CEO Mike Lazaridis, backed this statement saying, “RIM is committed to the BlackBerry PlayBook… We look forward to continuing to grow the installed base of PlayBook users and to attracting more and more developers to expand the volume of applications.”
Despite the rosy and optimistic statements, the fact is that this latest sell-off was only worse news for battered RIM stock. Since the beginning of 2011, RIM has seen a total loss of 75% in its value.
