Research In Motion Suppliers See Shares Fall

Blackberry maker, RIM, is watching it's stock price drop dramatically.

May 31, 2012- Suppliers of Research In Motion saw their stock prices fall on Wednesday as investors worried about the future of the Blackberry maker. Investors might underestimate the true problems that suppliers of Blackberry are possibly facing. With RIM’s business deteriorating, it spelled bad news for Jabil Circuit, Inc., Flextronics International Ltd, and Celestica Inc. Celestica sales from RIM total close to 20%, while Jabil counts on RIM for 15% of its sales and Flextronics 5%.

On Tuesday afternoon, near the closing bell, RIM warned they would post a loss for the quarter and said bankers were being hired to help the company decide what the future held for the business. The company, based in Canada, said a significant layoff of employees would take place.

Sales at RIM have slid tremendously, as the Blackberry is no longer as popular as it once was, and has yielded market share to Android phones and iPhones. After the news was released, stock for Celestica fell by 55 cents to $7.19 a drop of 7%. Jabil’s shares were down 3.5% to $19.35 after losing 71 cents and Flextronics lost 8 cents to close at $6.38.

A number of investment firms have a sell rating for Research In Motion stock and placed its target price at $9.50, down from $11.75. The value of RIM stock has fallen by close to 75% over the last 12 months.