Research In Motion (NASDAQ:RIMM) executives have declined to buy the company's shares on the open market since July 2010, the longest such period in six years, according to data compiled by Bloomberg. The decision to refrain from buying shares--at a time when insiders have sold 11 times in that span and RIM's share price has plunged 60 percent--could be an indication of how troubled the company is.
According to Bloomberg, at least 55 of the other 59 companies in the S&P/TSX 60 index of Canada's largest stocks have had insiders buying shares since July 2010. RIM declined to comment, according to Bloomberg.
The BlackBerry maker reported second-quarter results on Sept. 15 at the low end of its forecast and below what many analysts had been expecting. During the quarter, RIM shipped approximately 10.6 million BlackBerry smartphones and approximately 200,000 BlackBerry PlayBook tablets--in its previous quarter, RIM shipped 13.2 million smartphones and 500,000 PlayBooks . Analysts had expected RIM to ship around 11 million smartphones and around 500,000 tablets in its second quarter.
RIM co-CEO Jim Balsillie acknowledged RIM's quarter wasn't stellar, but said the company's new lineup of BlackBerry 7 smartphones--sales of which started at the end of RIM's second quarter--was generating significant sales among both existing and new BlackBerry users.
"We believe we are well positioned to take advantage of the upcoming holiday season" with BlackBerry 7, Balsillie said, noting that RIM expects its carrier partners, including those in the United States, to heavily advertise BB7 in the coming months. "BlackBerry 7 has a lot of runway," he said. RIM plans to release QNX-based smartphones next year--QNX represents a ground-up overhaul of the aging BlackBerry OS. (Interestingly, RIM has said it will show off prototype QNX smartphones to developers during its developer conference Oct. 18-20.)
The fact that both Balsillie and his co-CEO, Mike Lazaridis, have made bullish assessments of the company's prospects but have not bought shares in the company in more than a year should worry investors, an analyst said. "You could say ‘well, why is no one in your organization, including you both, buying stock?'" Matt Thornton, an Avian Securities analyst, told Bloomberg.
Meanwhile, RIM shares rose the most in two-and-a-half years Wednesday amid market chatter on takeover speculation. RIM rose $2.60, or 12 percent, to $23.60. The chatter came after the U.K.'s Independent newspaper reported Vodafone could be one of the "potential aggressors" amid "vague rumors" that RIM had asked an investment bank to look at strategic options.
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