Research In Motion Denies Split
Troubled cellular phone distributor Research In Motion Limited (NASDAQ: RIMM) has been covered in the press frequently as of late, with today's speculation being that the BlackBerry 10 developer is headed for a split. Now, the company is reaching out to deny claims made by U.K. news website The Sunday Times this past weekend.
The rumor, still circulating without a firm dismissal from Research In Motion's management, began over the weekend stating that the telecommunications company would be separating its handset business from its messaging division. The magnitude of a split has the potential to see approximately 80 percent of Research In Motion's revenue sold off to other companies that can better nurture its wounded reputation.
According to The Globe and Mail, the idea of splitting Research in Motion into two separate businesses was first uttered publicly by former RBC Dominion Securities analyst Mike Abramsky. However, Abramsky is not the only one that thinks the division of hardware and services could be incredibly valuable for the company.
"One former RIM executive, in a previous interview, maintained that the failure of RIM's handset business was clouding the value of the valuable services division, which many corporations and government departments rely on for secure communication," The Globe and Mail reported today.
One of Research In Motion's spokesmen commented today regarding the chatter, stating that the company is committed to their current turnaround strategy and will soon be launching new products.
On Monday afternoon, Research In Motion traded down over 7% near $9.16.
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