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Research in Motion (RIMM) co-CEOs Mike Lazaridis and Jim Balsillie resigned this morning and investors took the news harshly, sending shares of the company down 7% at one point. The Street may have been showing its disapproval of new RIM CEO Thorsten Heins, a company insider who most recently held the COO position. In a conference call with investors, Heins declared the shakeup at RIM was not a "seismic" event and suggested the company doesn't need to make drastic changes, which is not what the Street wanted to hear.
The beleaguered BlackBerry maker has seen its market share and stock price plummet over the past few years and many investors were demanding change at the top. According to The Wall Street Journal, Balsillie and Lazaridis agreed to step down in December, the board accepted their resignation and and unanimously backed Heins as the company's new leader (once the vetting process was completed). Lazaridis started RIM in 1984 with a friend after dropping out of college. He hired Balsillie to be the co-CEO and the two men shared in the company's success and failures. Lazaridis will now become a vice chairman at RIM and Balsillie keeps his membership on the board.
As the company reconfigures and reevaluates its role in the lucrative smartphone market, investors will also be soul searching. RIM stock has been dumped by both retail and institutional investors, losing nearly 88% since its peak in 2008. Todd Harrison, CEO of Minyanville.com, decided to sell the stock this morning after taking a position in December. Harrison bought the shares because he believed there was still fundamental value in the name and its patent technology. Takeover rumors swirled around the company, which helped spur a sharp rally to end 2011 and start 2102.
Now Harrison says long-term RIM investors need to reflect on why they're holding the stock.
"If you're buying a stock just for a takeover, that's always been a recipe for failure, at least in my experience," he says in the above clip. "You never want to hold a stock just because you own it higher."
Harrison decided to exit RIM for good when stock went "parabolic" - signaling a lot of "fast money" had entered the trade. He's less bullish on the stock in the short term but says Ballisillie and Lazaridis haven't left the company for dead. They are, after all, two of RIM's biggest shareholders.
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