Co-CEOs of Research In Motion (RIMM), Michael Lazaridis and James Balsillie, have both resigned from the struggling handset manufacturer. Now the new CEO, Thorsten Heins, will be taking control. You would think that a change in management structure would be positive for shareholders, but that does not seem to be the case. Investors have been selling as they do not see Heins as a viable candidate for the company. The stock fell 7% on the day of the announcement.
CNBC recently interviewed Heins and he talked about what strategies he would do to get the company back on track. You can see his interview here.
- Hire A New Chief Marketing Officer
- Focus On Current Portfolio
- Seek Advice From Board Of Directors (Lazaridis
Heins said that RIMM needed a PR boost and that a top notch CMO would help them better market their brand. Heins said "We need to talk about how great our products are." This is really disappointing to see from the new CEO. The fact that he fails to see that his products are not able to compete with Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) is major issue.
If Heins truly believes that the current state of the Blackberry products is fine, then the company will implement very little change in its production strategy. This means Apple and Google will continue to be the top dogs in the market place, while RIMM will continue to fall.
The point of a new CEO was to change the plan that Lazaridis and Balsillie had. The initial plan was just to continue with QNX O/S and Playbook 2.0. Another issue that I had with the CEO's comments was when he said that Blackberry 7 was a massive improvement and is a positive sign. Sure BB7 is an improvement, but it is nowhere near where IOS and Android are.
This basically means that Heins will just continue by building the current portfolio. However, the biggest issue that I have with Heins is that he just may be a puppet for the board of directors. Keep in mind, the former co-CEOs are going to still be on the BoD. Heins says he will continue to reach out to both of them for advice. Wasn't the whole point of replacing management was so that the former CEOs would not have any influence?
Just because Heins is CEO does not necessarily mean that he is in charge. I believe, based on Heins comments, that he will continue to do what the board tells him to do. Personally, I would have rather preferred if RIMM brought an outsider as CEO. Heins is a mirror image of Lazardis and Balsillie. I urge investors to stay away from this company.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.