BlackBerry maker Research In Motion Ltd. (NASDAQ: RIMM) is likely to name Royal Bank Canada's Barbara Stymiest as its chairman, an analyst at Jefferies said/
Stymiest is considered one of the top executives in Canada.
We would view such an announcement positively as we believe she will initiate a formal strategic review, possibly trim costs in the hardware business, and possibly announce additional partnerships; however, we continue to see an outright sale in the near-term as unlikely and see near-term results as challenged, said Peter Misek, an analyst at Jefferies.
Stymiest has a senior position at Royal Bank Canada as Group Head of Strategy, Treasury and Corporate Services. She is also often cited as a successor to Royal Bank Canada's current President and CEO, Gordon Nixon.
Misek says this will make Stymiest the first female bank CEO and probably the most powerful CEO in Canada. This means her accepting the RIM chairmanship is not without risk or pressure.
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The analyst believes Stymiest will initiate a formal strategic review. He believes some of this has already been started with RIM likely agreeing to license Blackberry 10 to Samsung, HTC, and possibly others.
The analyst says this will help create a critical mass for the ecosystem and maintain RIM's monthly service revenue. However, it puts more pressure on the hardware business in the short term.
Longer term, it possibly gets people hooked on the RIM ecosystem and may in fact allow them to sell more BlackBerry 10 handsets (if they are able to create compelling handsets), he says.
What else could RIM do? RIM could restructure the hardware business to make it profitable. We believe an outright sale is unlikely at this point. A partnership with Microsoft and Nokia Corp. is also possible but less likely as RIM cedes much value without long-term benefits apart from survival, says Misek.
RIM stock closed Tuesday's regular trading up 6.97 percent at $15.51 on the NASDAQ Stock Market, while in after-hours the stock further rose 0.39 percent.