When Jim Balsillie joined Research in Motion back in 1992, the company was still in its infancy. It had excelled in the engineering department, but lacked the business know-how necessary to take the company to the next level. The hiring of Balsillie changed all of that. With his help the company became the top smart phone maker in the world.
Research in Motion has gone through a lot of changes as of late. It changed its name to BlackBerry (BBRY), and shuffled its top-level management. Balsillie, who was one of the strongest voices behind the company, stepped down from his position as co-CEO last year in the midst of growing frustration by investors in regards to the company's inability to compete in today's market.
The biggest problem for BlackBerry is that it lost the “cool factor” that it once had. With Apple's (AAPL) iPhone, and an army of Google (GOOG) powered Android phones dominating the current market, BlackBerry has been unable to keep pace.
After several delays, the company finally unveiled its new lineup of BlackBerry 10 phones late last month and the stakes are high. BlackBerry 10 is the company's last chance at turning things around, and so far the reviews have been generally positive.
While the positive reviews could be a good enough reason for investors to once again jump into the stock, one person who is not convinced in the company's ability to turn around is none other than its former CEO, Balsillie.
As recently as December 2011, Balsillie owned a 5.1% stake in the company, but as of the end of 2012, he had sold off his entire stake. There were no details on when he sold, or for what amount, but what is clear is that he has made the decision to cash out and distance himself from the struggling company.
Should investors really care whether or not Balsillie owns a stake in the company? I don't think so. It really doesn't change my view on the company one way or the other. He has been out of the picture for nearly a year, so what difference does it really make if he believes in the stock or not?
I have been extremely bearish on the stock for years, and today's news really does nothing to make that view better or worse. I see it as a non-issue. The reality remains the same… BlackBerry 10 must be a success or the company is not going to make it.
While reviews have been positive, I personally do not believe BlackBerry 10 will be enough of a success to return the company to its former glory. There are still not enough available apps to convince people to abandon their iPhone or Android phone, and the company has lost so much market share that the challenge it faces seems too big to overcome.
BlackBerry was once the cool phone to own… but those days are long gone, and nothing is going to bring them back.
Michael Fowlkes is a financial writer who has been with the Fresh Brewed Media family since 2004. Over the course of his tenure with Fresh Brewed Media, he has worn many hats, including portfolio manager, options analyst, and writer. Michael received his undergraduate degree from Virginia Tech in Accounting and got his start in finance working as a stock trader for six years at Chase Investment Counsel in Charlottesville, Va. His articles typically cover big-picture events and forecasting what impact they will have on the stock market. In addition to writing for Fresh Brewed Media, Michael also wrote for AOL's BloggingStocks for three years, focusing most of his attention on the energy and technology sectors. Follow him on Twitter at @MFatMICenter.