Business, Economics and Jobs

RIM, Blackberry-maker stocks sliced by nearly 25%


Shares in Research in Motion (RIM), the maker of the Blackberry, dropped precipitously on Friday, ahead of the Blackberry 10 device launch in January.


Justin Sullivan

Shares in the Blackberry-maker Research in Motion (RIM) dropped by nearly 25 percent on Friday.

RIM fell by 22.7 percent on its NASDAQ-listed shared closing at $10.91, while falling 22.2 percent on the Toronto Stock Exchange (TSX).

Reuters reported that investors fled over worries about a new service-fee structure that threatens one third of the company's profits.

Service fees are paid by carriers and business subscribers for enhanced features like security.

RIM did not specify how the new service fee structure would work but it spooked investors enough to make them flee the stock en masse.

Many worry that the fees might disrupt the Blackberry services network and make the company a simple handset maker.

The Wall Street Journal said that the announcement came Thursday night after market close.

The announcement overshadowed positive news about better-than-expected quarterly results.

It also came just a few weeks before the unveiling of the new Blackberry 10, a handset that RIM is counting on to boost the company's recent bad fortunes.

MarketWatch reported that as handset sales decline, service fees now make up 35 percent of the company's revenue.

Friday's precipitous drop in share price was stock's biggest, single-day, decline since September 2008.