Listening to today’s late afternoon webcast of RIM’s preliminary third quarter results was like being taken back to the dot.com era when analysts acted more like cheerleaders than objective examiners of the corporation’s health and financial results. Not a single question focused on RIM’s stock option problems. No one asked why the board’s internal investigation was taking so long, why the OSC was recently told that the resulting adjustment would be “significantly higher” than originally expected or what that was likely to mean. Amazingly, the topic of whether RIM would continue to issue stock options to non-management directors in the face of IBM’s much praised move to eliminate them wasn’t even raised. Judging from this show, we have moved back to a time when corporate governance doesn’t figure into the analysts’ equations. Almost every question started off with effusive congratulations to management for their stellar accomplishments. By the soft nature of the questions and unchallenging acceptance of the answers, it seemed more like RIM’s public relations department on the call.
RIM’s short-term results were impressive. But as we have learned from painful experience in recent years, that is only part of a company’s picture. And as was so often the case in the past, it was the questions not asked about matters not considered important that caused the greatest pain to investors.