NEW YORK (AP) — Worries about the fate of Research In Motion Ltd. weighed on shares in premarket trading Wednesday, a day after the BlackBerry maker warned of another quarterly loss and said it was hiring bankers to help it decide what to do with the company.
The stock was down $1.15, or 10 percent, at $10.08 in U.S. trading before the open. The shares haven’t been that low in regular trading since 2003, when RIM launched its first smartphones. Shares are down 23 percent this year and have lost nearly 75 percent of their value over the past 12 months.
Late Tuesday, the Canadian company said it was losing money for the second consecutive quarter and will lay off a “significant” number of employees. RIM’s sales are sliding as BlackBerrys fall out of fashion, yielding to iPhones and Android phones.
RIM has hired bankers to help it weigh its options, which include partnering with other companies, licensing software and overhauling its business.
The Waterloo, Ontario company‘s troubles are well known, but Scott Sutherland, an analyst at Wedbush Morgan, said the update pointed to RIM’s business deteriorating faster than he expected. He cut his price target on the shares by $2 to $9.50.
And some analysts think RIM may not have an easy time finding a solution to its problems through a sale of the company, an option CEO Thorsten Heins did not rule out after RIM’s last earnings report in March.
In a research note entitled “Sliding into the Abyss,” analyst Stuart Jeffrey of Nomura Securities said other technology companies seem to have shown little interest in buying RIM. Financially motivated buyers, like private equity firms, might show interest once the stock drops below $6, he said. Even with collapsing phone sales, RIM makes money from delivering email to BlackBerry phones that are in use.R Soft Web Hosting