Research In Motion (RIM) announced a stock buyback program following the loss of one-third of the company's value in the past six weeks. The company's board of directors approved a plan that will take up to US$1.2 billion in company resources to repurchase as much as 21 million common shares at today's price.
RIM's stock was hit by a selloff following its earnings report for the August quarter of 2009. The stock hit a high of $88.08 per share prior to its August quarter announcement in September, but those results were considered disappointing in terms of revenue and earnings, and RIM warned that pricing would be weaker in the November quarter.
RIM's dominant BlackBerry smartphone has been under pressure from Apple's popular iPhone, and the market has expressed concern over new pressure from Google's Android platform, especially Verizon's decision to heavily promote the Motorola Droid, as noted by MarketWatch.
In a statement, the company said, "RIM's Board of Directors believes that a share repurchase program at this time is in the best interests of RIM and its shareholders, and will not impact RIM's ability to execute its growth plans given the strength of RIM's balance sheet and expected cash flow generation over the next several quarters. Any shares purchased under the program will increase the proportionate interest of, and may be advantageous to, all remaining shareholders of RIM."
Today RIM's stock showed a slight gain, closing at $57.79 per share, a gain of $.18 (+0.31%), on moderate volume of 20.3 million shares trading hands.
Shares in AAPL also gained, with the stock closing at $194.0301 per share, a gain of $3.2201 (+1.69%), on very light volume of 13.6 million shares trading hands.