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BREAKING: RIM settles with OSC for $76 million, Balsillie to step down from board

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Mike Lazaridis and Jim Balsillie

Woah. It looks like the Ontario Securities Commission has made their decision on a possible settlement with RIM over their backdating scandal. The news is fresh as of an hour ago, so I’m just going to quote straight from Reuters:

Research In Motion Co-Chief Executive Jim Balsillie will step down from the board and, along with other executives of the company that makes the BlackBerry smartphone, will repay tens of millions of dollars to settle stock-option allegations dating back to 1996.

Under the pact reached with the Ontario Securities Commission and approved on Thursday, Balsillie will pay a penalty of C$5 million ($4.1 million), while Co-Chief Executive Mike Lazaridis will pay a C$1.5 million penalty. The two men also must pay investigation costs to the regulator.

The agreement also stipulates that the two co-CEOs and RIM’s former CFO, Dennis Kavelman, will repay C$38.3 million to the company. They must also repay about C$30 million to cover the costs of a voluntary internal probe into the matter undertaken by RIM earlier.

Balsillie and Lazaridis had already paid C$15 million to offset the costs of the Waterloo, Ontario-based company’s internal review. Balsillie may not serve on RIM’s board for at least 12 months as part of the settlement, and Kavelman must pay a C$1.5 million penalty.

The OSC alleged the executives backdated and repriced stock options using dates on which the market price of RIM’s shares was relatively low. Handing out options at the lower prices had the effect of improperly enriching the recipients and, the OSC alleged, could have deprived RIM of about C$66 million.

It’s a huge chunk of change, but at least RIM can now put this whole affair behind them. You can see statements from Balsillie and the OSC after the jump.

|via Reuters|

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RIM’s stock jumps on Q4 promises

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A quick look at RIM’s stock on Yahoo! Finance shows that the Waterloo company has jumped a quick $3 from close yesterday, roughly 8% of their total share price, to $41.50. Analysts are attributing the minor (but welcome) bump not so much to yesterday’s fiscal Q3 2009 earnings report, but RIM’s guidance for Q4.

While analysts had expected revenue of $2.97 billion and earnings per share of 83 cents on average, RIM is expecting Q4 sales of $3.3 billion to $3.5 billion and earnings of 83 to 91 cents per share. These figures are being attributed to a “record number” of Q4 device shipments, likely due to multiple launch delays.

If RIM has the quarter in Q4 they wanted to have in Q3, expect the market to respond in a big way. For now, it’s cautious optimism to promises of future gains.

|via Reuters|

RIM to announce Q3 2009 fiscal results December 18th (BlackBerry Bytes)

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Thursday, December 18th will likely be one of the most important days of 2008 for RIM. On the 18th, RIM will report their Q3 2009 fiscal results after market close. Considering RIM’s sliding stock price and their lowered Q3 outlook, the focus may just be on how bad the numbers are.

RIM will hold a conference call and live webcast at 5 pm ET on the 18th, which can be accessed by dialing 800-733-7571 or by logging on at www.rim.com/investors/events/index.shtml. As always, you can expect the live blogging coverage of the conference call you’ve come to expect from BlackBerry Cool.

Jim Balsillie: market environment ‘Intense’, Bold selling ‘Really Well’

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RIM Co-CEO Jim BalsillieSpeaking at an investor conference earlier today, RIM co-CEO Jim Balsillie said the current market environment is rife with challenges that require careful planning.

“This is a more intense time than I’ve ever known — more variables, more need to navigate, more hands on the wheel, eyes on the road right now,” he said. “If you don’t, you do it at your peril.”

Based on the news we posted a few days ago, investors can’t agree on whether RIM is in a prime position for growth or ‘chasing Apple’. However, most agree that the current economic downturn will have a negative effect on sales.

UBS Investment Research analyst Jeffrey Fan cut his RIM revenue and earnings estimates today to reflect lower sales during the slowdown.

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Seeking Alpha torn over RIM

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RIM logo

It might just be a sign of where the economy is, but financial website SeekingAlpha has published two thoughtful, well written articles saying two completely different things about RIM’s future. First up is SA analyst Bapcha, who says that RIM is currently the cheapest growth stock:

Research In Motion (RIMM), the manufacturer of the (Bl/Cr)ackBerry, turned in some exemplary numbers. For the three months ended Aug 30, 2008 (RIM’s Q2, 2009), revenue was $2.58 billion, up 15% from $2.24 billion in the previous quarter and up 88% from $1.37 billion in the same quarter of last year. The revenue breakdown for the quarter was approximately 82% for devices, 13% for service, 3% for software and 2% for other revenue.

During the quarter, RIM shipped approximately 6.1 million devices, and grew their subscriber base by 2.6 Million. Awesome numbers. In fact, for fiscal 2009 [ending Feb 2009], top-line growth of 80% and a growth of 70% in EPS is at the low end of what the company thinks they can churn out [awesome]. For fiscal 2010 [March 2009 to Feb 2010], I think that a growth in revenues of 40% yoy and EPS of 35% yoy [assuming slightly lower gross margins moving forward] are for sure numbers that RIMM can deliver on.

However, fellow SA analyst Matt Stewart has prepared five reasons why RIM will continue to fall.

Five reasons RIM will continue to fall

RIM stock outlook: the day after

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rim financial slide

If you’re a RIM shareholder right now, you probably feel as though you woke up on the wrong side of the bed this morning. RIM’s stock opened 20 points down on the Nasdaq from its close last night at $97.53, and is now hovering around $73 per share. Checking the latest financial news today, it’s clear that this fall is reflective of myriad issues, ranging from RIM’s low Q3 forecast to the general economic climate. Here’s the best reports we’ve seen so far on the issue.

MarketWatch: Research In Motion sinks on disappointing forecast

“RIM’s business model is starting to show its pressure points. The company has become increasingly dependent on hardware sales. As a result, the timing of new product launches can have a big impact on their results,” wrote Brian Modoff of Deutsche Bank in a report, in which he cut the stock to a sell rating. “We think this trend will only worsen and their numbers are now, more than ever, dependent on a steady stream of hit products.”

Yahoo! Finance: Premarket roundup: Research in Motion

Analysts were thoroughly divided Friday about the meaning of BlackBerry maker Research in Motion Ltd.’s latest financial report, while investors united in a rush to dump the stock.

More RIM Financial News