On the shelf of its plateau, following the major marketing climax surrounding the unit, I watched a woman in a restaurant fondle her Blackberry Pearl for minutes on end, totally oblivious to her surroundings. It was shocking, but at the same time, oddly alluring. The sort of strangely pornographic short film that you aren't sure is supposed to be arousing. It was the sex scene that had to be pruned to calm the MPAA down enough to agree to keep the "R" rating. Highly suggestive, oddly carnal. The sort of scene that makes you uncomfortable, but which you cannot, for the life of you, tear your eyes from. As if your mother was in the theater too, or maybe your kid sister. You don't want to admit it gets to you, but neither do you want anyone to know you are watching. It was just before I left for Europe and, judging by the suit and the resigned look of a shattered social life she wore like a blood soaked glove, she might have been a frustrated banker, or an attorney.
Some time before that, irony of ironies, a close colleague of mine in the LBO world (and sometime adviser to Going Private on activism) found a female M&A attorney's Pearl in a Chicago taxi. Calling her (and resisting the temptation to read her deal related email) he arranged to have her pick it up at the concierge desk at the Grand Hyatt. In return she left him a box of chocolates and a thank you note that invited him to dinner at Coco Pazzo. He, having already dated a sufficient number of female attorneys to recognize a deadly trap when presented with one, politely declined the invitation. "The sex is great the first several times because of all the pent up frustration, but they have short tempers and really go for the jugular when angered," he observed. I can't comment on that, but it is safe to say that professional women have a very intense and personal relationship with their Pearls, I think.
I, mercifully, have managed to avoid redirecting sexual frustration to a glowing, hooded bead at the top of a Blackberry keyboard. It may be more a resentment for Research in Motion in general than anything else. The studied Going Private reader will recall that my distaste for the firm goes back quite some time. I do wish the stock would get the stuffing kicked out of it again so that someone could mount an LBO. Imagine my disappointment that today's outage (subscription required) didn't punish RIM more. Still, the prospects for the future don't seem all that dim, really.
At its current price of around $133 per share it is a bit expensive for an LBO (with trailing twelve month PE ratio of almost 40 in a industry where PEs sit at 25 or so, a price to sales ratio of something like 8 and a price to tangible book of over 10) but the stock has been very volatile (its beta approaches 3 and the 52 week low for the stock is something like $61 per share and that was 9 months ago). Even hitting the $80s again would give it a forward P/E of 16-17.
The other thing that strikes me about RIM is that most of its problems seem to stem from management issues. Service outages like yesterday and todays just aren't excusable in the telecom business when your product's only purpose is universal connectivity. It frustrates the female lawyers, and let my LBO colleague tell you, that is just asking for trouble. Add to this the kind of arrogance that gets you in patent disputes with the likes of NTP (and near suffering an injunction to boot- who does that besides Vonage?) challenged margins and the entry of the likes of Apple and I think there might be room for a good bit of change at the top.
Perhaps it would make a better activist project? $2 billion in cash equivalents on the books. But probably not. It's a huge growth stock and more than three quarters of the shareholders are institutionals and they are showing a 30% return on equity right now. Hard to imagine shareholders are that mad, or impatient.
Alas, I think we are stuck with them "as is" for awhile and we probably have to expect the introduction of the Blackberry "Rosebud" any day now. Still, I can dream.