RIM shares volatile after outage, downgrade
Users in Europe, the Middle East and Africa lost email
Shares of Research in Motion were volatile, rebounding sharply after a steep fall at the open after BlackBerry users in Europe, Middle East and Africa were affected by a service outage and an analyst downgraded its stock.
RIM recovered from a 2.6 per cent drop at the open to close up $1.52, or 13 per cent, at $13.31 Friday.
Service provider Vodafone apologized after some customers lost emails, blaming a router error.
The problem appeared to be caused by connection issues with the wireless carrier’s systems.
RIM said it was supporting Vodafone’s attempts to restore service.
"We continue to monitor the situation closely," it said in a release.
Other service outages over the last two years have hit millions of RIM customers.
Also Friday an analyst for BMO Nesbitt Burns, Tim Long, warned that he expected its shares to lag behind the wider stock market, predicting the release of BlackBerry 10 devices later this month will fail to recover market share lost to Apple’s iPhone and devices running on Google’s Android software.
Short sellers hold 25%
"We are modeling one million fewer BB subs (subscribers) each quarter, which may be too optimistic," he said in a research note to clients.
Pressure will remain on RIM and its stock price even after the launch as the market gauges consumer response to its new smartphones, analysts said.
Will the new generation of BlackBerrys be attractive enough to get Android and iPhone users to switch off those devices and go over to RIM, asked telecom analyst Troy Crandall.
"That's the huge question," said Crandall, of Montreal-based MacDougall, MacDougall & MacTier.
The BlackBerry 10 is seen as a make-or-break product for RIM.
"It's their game to lose at this point," Crandall said.
Shares in the RIM have been volatile for weeks in the leadup to the launch with wild swings amid share shorting.
Crandall said about 25 per cent of RIM's 524 million shares outstanding on the Toronto Stock Exchange and New York's Nasdaq are held by short sellers.
These investors have essentially bet against RIM's success and lose money when the company's stock goes up. But they can also help drive the stock price up when they rush to cover their positions.
With files from The Canadian Press