Interestingly, it has been reported that value investor and RIMM shareholder Prem Watsa was the catalyst for change.
"The catalyst for change appears to have been the entry of a new personality: reserved but revered investor Prem Watsa, CEO of Fairfax Financial. Mr. Watsa, who has been called Canada’s Warren Buffett for his business acumen, has been quietly buying RIM stock for some time. Fairfax is now one of RIM’s largest shareholders, and Mr. Watsa is being appointed to the company’s board of directors after playing a role in key discussions in recent weeks."
Only a few months ago, it was reported that Watsa had no interest in shaking up management at RIMM.
"Research-In-Motion is run by two guys, Mike Lazaridis, who's really the founder, and co-CEO Jim Balsillie, these guys have taken the company from 0 to $20 billion, and in our experience, that's not easy to do. It's very competitive, and yes they have some challenges ahead of them, but the guys who have taken it from 0 to $20 billion will be able to figure their way through this.
However, something appears to have changed for Watsa, whose Fairfax Capital owns 2.25% of RIMM and has lost a lot of money over the last year on it's holdings in the beleaguered Canadian tech company.
Mr. Watsa reiterated that he's "a great fan of Mike and Jim." However, Watsa also noted that "they needed a disciplined operator to take this forward.”
My interpretation Watsa's suggestion that RIMM needs a "disciplined operator" means that RIMM needs a CEO who will focus on extracting cash from the business side of RIMM's operations and will avoid costly R&D on projects such as the Playbook. In essence, RIMM is waving the white flag when it comes to the consumer smartphone market. Many believe that RIMM should focus on the business end of market and generate huge cash flow and avoid the allure of being a growth company. RIMM could also sell of it's arsenal of patents and could also sell it's consumer business to Samsung or Nokia.