Can Carl Icahn Save Research In Motion?

Back in the 1980s, Carl Icahn was known as a corporate raider. He would target
troubled companies and try to force an outcome such as a going-private
transaction, a huge dividend or a merger. Icahn now calls himself an "activist
investor" but his approach hasn't changed much. And he still has no trouble
finding companies to agitate. So it makes sense that there is buzz that he has
taken a hefty position in troubled tech company Research In Motion (Nasdaq: RIMM
). RIMM's BlackBerry smartphone looks like a technological museum piece.
Apple's (Nasdaq: AAPL ) iPhone and iPad continue to take market share in the
premium market, while Google's (Nasdaq: GOOG ) Android is cleaning up on the
low end. In fact, now Amazon.com (Nasdaq: AMZN ) is poised to make inroads with
its highly-anticipated Kindle Fire tablet. As a result, there isn't much room
left for other rivals, such as Microsoft (Nasdaq: MSFT ) and Nokia (NYSE: NOK ).
Despite all this, RIM does have some hope. In the corporate market, the company
still has entrenched customers. They realize the value of strong security and
compliance features as well as seamless integration with Microsoft products.
Such things are not easy to develop. In addition, RIM has a portfolio of more
than 2,000 patents. In today's highly litigious world especially in the
mobile market this is certainly an attractive asset. So can Icahn be the
catalyst to realize these advantages? Maybe there will be a short-term bump. But
keep in mind that RIM's Co-CEOs, Jim Balsillie and Mike Lazaridis, control
nearly 11% of the outstanding shares. In other words, they will have lots of
leverage in repelling an attack. At the same time, the Canadian government has
shown its willingness to block hostile bids on companies that are considered
strategic. True, Icahn has had some wins. The most recent was Google's
purchase of Motorola Mobility (NYSE: MMI ), a company in which Icahn had a
stake. Yet there have been some high-profile failures as well, including Clorox
(NYSE: CLX ) and Lions Gate Entertainment (NYSE: LGF ). Even if Icahn is
successful in provoking some kind of benefit for shareholders, it could easily
take six months or longer. Corporate activism usually requires lots of patience.
But in light of the competitive environment, there is likely to be continued
deterioration in RIM's business. It's probably best to stay away from the
stock for now. Tom Taulli is the author of " All About Short Selling " and
" All About Commodities ." You can also find him at Twitter account
@ttaulli. He does not own a position in any of the stocks named here.