RIM bruises a few berries
With the findings of Research In Motion’s (RIM-TSX) options investigation now out, there will be no end of caterwalling from the dead tree media about the shame of it all. Key themes will include: “where was the board?”, “who knew and when did they know it?”, “why didn’t they bring a professional manager in years ago?”, “why is this being swept under the carpet?”, and so on.
Ignore it all.
This story cannot last more than a few days without new juice to give the story new legs. And none is coming.
There won’t be a single equity research analyst to call for a very senior resignation. There is no Tweedy Brown (think Hollinger) to pursue the team at the next annual general meeting. The local regulators are never looking to tarnish a major icon, and few public firms are as important as RIM to our consciousness (perhaps they’ll mumble some conforting words to the SEC as well). Maybe the Royal Bank, and they’re lending their own talent to help fix the situation. The institutional shareholders, as the ultimate bosses at RIM (Fidelity being the largest), have only to think about one thing. Since winter 2001 (or so) the stock is up about 20 times from the lows of $15 pre split. And the fiduciary obligations of these portfolio managers is to their unit holders and pensioners, and no one has ever lived in a world without Jim and Mike at the helm, and no one wants to imagine one, either.
RIM has always succeeded going against the basic textbook plays for growing a North American tech firm: No VC money at the start. Founders stayed at the helm throughout. No fancy names on the board of directors. And never turn away from a fight (NTP). Didn’t sell out cheap (HP).
In this case, they’ve done all they can to follow the textbook for dealing with a PR nightmare. In the end, even the folks that call their own plays know how to follow them as well. When they absolutely have no choice. That’s smart.
So, the story ends here. ‘Cause it has to. As with Steve Jobs and his options backdating scuffle, people will think the best. RIM is a Canadian business, technology and charitable icon. Its our Apple. And it can’t be tarnished.
They are justifiably untouchable.