BlackBerry maker's cash burn emerges as pressing concern

By Alastair Sharp

TORONTO (Reuters) - While Research In Motion Ltd focuses on the make-or-break launch of its next-generation BlackBerrys later this year, a more immediate question for the embattled company is whether its cash can hold out until the new phones finally hit the market.

RIM has already told investors to expect an operating loss when it releases fiscal first-quarter results on Thursday. With that in mind, the focus is now squarely on whether RIM, by reining in costs, mostly through job cuts, can buy enough time to get its shiny new smartphones into the hands of consumers.

"All I care about is cash. This is a distressed situation so focus should be on cash," said Matthew Thornton, an analyst at Avian Securities in Boston.

"If they're not cutting operating costs fast enough, then cash can drop off very quickly, and that's going to have implications for the stock and the valuation," he said.

RIM has no debt and roughly $4 a share of cash and investments, a cash pile Thorsten Heins, the company's new chief executive, has said will increase this quarter. But bankers say RIM could blow through that $2.1 billion very quickly trying to right the ship.

If cash dwindles to the point where operations suffer, analysts say RIM may have to take on debt at unfavorable terms or issue dilutive stock at a discount to its already low price. Such scenarios would only heighten the sense that RIM's very survival hangs in the balance.

The stock is hovering at eight-year lows around $10, little more than double what the company earned per share in its last fiscal year and a fraction of the glory days near $150 in 2008.

STAKES ARE HIGH