Research In Motion, the Canadian based maker of Blackberry smartphones and the PlayBook tablet could see its cash dry up and fail, even with the proposed launch of its Blackberry 10 early next year, says Wall Street analysts.
The price target for RIM stock was cut by 10 brokerages, some cut it be 50%. This comes a day after RIM reported much worse than expected results from their first quarter and announced it would have to delay the launch of its new Blackberry until sometime in early 2013.
Shares of RIM were off 15% in the early pre-trading hours of Nasdaq on Friday. One brokerage firm said they do not think RIM can successfully turnaround its financials, even with next year’s launch of the Blackberry 10. It added that the firm could see RIM disappearing by 2020 through a gradual decline.
Analysts from Jefferies and Citi Investment Research have slashed their target price of the stock to just $5.00. That represents a drop of 45% from the close on Thursday. RIM is cutting 5,000 jobs, which is 30% of its entire work force. Some analysts feel the company should hire and not fire so they can get products to market quicker. They said the distraction from the firings would cause those workers that remain to be uncomfortable and less productive in the short term.
RIM stock has dropped 70% in one year and on Friday morning was down to $7.75 in pre-trading.
