More trouble in RIM land; shares tumble early

Associated Press
FILE - In this Oct. 18, 2011 file photo, Mike Lazaridis, co-CEO of Research in Motion gestures at the end of his keynote address to the BlackBerry DevCon Americas conference in San Francisco. Research In Motion Ltd. reports quarterly financial results Thursday, Dec. 15, 2011, after the market close (AP Photo/Eric Risberg, File)
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FILE - In this Oct. 18, 2011 file photo, Mike Lazaridis, co-CEO of Research in Motion gestures at the end of his keynote address to the BlackBerry DevCon Americas conference in San Francisco. Research In Motion Ltd. reports quarterly financial results Thursday, Dec. 15, 2011, after the market close (AP Photo/Eric Risberg, File)

NEW YORK (AP) — Shares of Research In Motion slumped to their lowest level since 2004 Friday in premarket trading after the Blackberry maker piled more bad news on investors.

The company has had a disastrous 2011, and Thursday's earnings report provided little hope for 2012. The company said new software that's seen as a last-ditch attempt to revive interest in its phones will be delayed until late next year because a critical computer chip is not yet available.

The company, based in Waterloo, Ont., also said BlackBerry sales will fall sharply during the critical holiday shopping period. Sales are cratering in the U.S., where it's losing out to iPhones and Android phones. Overseas, it's still enjoying some success.

Shares fell 11 percent, or $1.61, to $13.52 before the market opened.

Most analysts have written off RIM's chances of a comeback, and switched to valuing the company for its parts, figuring that it has more value sold or broken up. Now, analysts are reconsidering even that rock-bottom valuation model, since unlocking the value appears difficult.

"Management remains in complete denial of the situation and we believe the company could start losing money and burning cash by the end of next summer," said Pierre Ferragu of Sanford Bernstein, in a morning research report. "Without any change in strategic direction, we think RIM's stock is unlikely to see any valuation floor in the near term."

He rates Research In Motion Ltd. "Market-perform" with a price target of $16.

"Finding a near-term valuation floor remains difficult due to the lack of potential acquirers and the unlikelihood of a substantial restructuring," said Peter Misek at Jefferies. He kept a "Sell" rating and cut his price target to $13.50 from $14.

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