In an ironic twist of Canadian lore, I have decided to “Roll Up The Rim” – not to win a prize at Tim Horton’s, but to remove Research In Motion (RIMM) from the Cara 100. What I see going on today at RIM is clearly not an illustration of Best Company practices.
The front page headline in Wednesday’s Globe & Mail Report On Business states, “RIM options scandal may leave workers with huge tax bills.” If you have any interest in the shares of Canada’s Research In Motion, I hope you read this article carefully.
The current situation at RIM is alarming, and has caused me to eliminate the company from the Cara 100. I won’t honor a company that is potentially broken for reasons of its own doing, and which may involve criminality.
According to the ROB reporter Janet McFarland, RIM’s Co-CEO Jim Balsillie said the problem “was an error due to a misunderstanding of accounting rules.” Hmm. Because there were 321 “errors” over many years (2002 to 2006), I don’t think shareholders ought to just take Mr. Balsillie for his word. Given that he may be telling the truth, however, I think, for the sake of affirming his personal and his company’s credibility, Balsillie ought to produce (properly-dated) letters of opinion of his company’s tax lawyers and accountants on this matter. And if Balsillie can’t, I think prosecutors ought to get involved.
I don’t expect the SEC to do a thing here with Research In Motion, or with Apple (NASDAQ:AAPL) or any of what I believe will be well in excess of 1000 public companies that are looking to Cox and the Administration for support. But, SEC chairman Chris Cox can sit on his thumb for all I care. The stakeholders including employees and shareholders have a need to know the truth. So, when the authorities diddle themselves in typical fashion, I think those affected shareholders ought to press the matter in court.
I’m going to guess that this matter is likely to end in humongous class-action law suits, which takes time. The action I can take today is to strike Research In Motion from the Cara 100, so I have.
Big deal? Well, it is to me.
RIMM 5-mo chart