So What about RIM?
RIM’s announcement on September 28 mentioned only “accounting errors†without specifying the nature of the errors. Their follow-up announcement on October 13 about the delay concerned a practice whereby RIM in essence allowed employees to take a loan against their option profits to finance the purchase of the shares at the exercise price. There is nothing wrong about that, but Canadian and American accounting rules differ as to how to show this on the balance sheet and the American formula is much more complicated. The delay is caused by the need to produce 2 different sets of income statements under the differing rules.
Investors don’t seem troubled by any of this. As reported in the Wall Street Journal:
The stock is up about 30% since RIM posted strong fiscal second-quarter financial results and offered better-than-expected guidance on September 28. “The market doesn’t care unless something gigantic and nefarious occurred in the recent past that imperils the CEO of a company,†said [one] large institutional investor. “The market is a forward-looking animal.â€
Perhaps most revealing was this investor’s comment: “The world is (RIM’s) oyster.â€
