June 4, 2012 / 7:33 PM / 5 years ago

UPDATE 1-RIM shares slide further as investor fears mount

* RIM shares drop 5.8 percent to $9.67 on Nasdaq

* Toronto-listed shares fall 5.7 percent to C$10.08

* Investors fear further decline in BlackBerry sales (Adds analyst comment, details)

TORONTO, June 4 (Reuters) - Research In Motion’s share price on Monday breached a level that technical analysts say could spur further declines, after an analyst warned that the BlackBerry maker’s sales were dismal last month.

After an announcement that the company has begun exploring strategic options, the sentiment is still extremely bearish on the stock, said Elvis Picardo, a strategist at Global Securities in Vancouver.

RIM’s shares fell 5.8 percent to $9.67 at 2.30 p.m. (1830 GMT) on the Nasdaq, while its Toronto-listed shares were 5.7 percent lower at C$10.08. The stock has not traded at these levels since late 2003.

“You would have expected the C$10 level to have provided pretty strong support, but if it cracks through that it’s really hard to say where this decline will stop,” said Picardo.

The Waterloo, Ontario-based company’s announcement last Tuesday that it had hired bankers to commence a strategic review has so far done little to quell investor concerns about RIM’s prospects, and the stock has fallen nearly 15 percent in the past week alone.

“Technically it’s not looking good at all,” said Don Vialoux a research analyst at Horizon Investment Management. “It trades well below its 20-, 50-, and 200-day moving averages and has given no indication of trying to bottom as of yet.”

BLEAK OUTLOOK

The stock’s latest slide comes just days after the company warned that it expects to post a fiscal first-quarter operating loss in the quarter ended June 2.

“Our checks indicate that U.S. BlackBerry sales likely declined further in May, while inventory remained relatively stable,” said Pacific Crest analyst James Faucette in a note to clients on Sunday.

Faucette believes that telecom carriers now hold about six to eight weeks of BlackBerry inventory, which is roughly three to four times normal levels.

Moreover, Faucette notes that the majority of RIM’s sales in Europe are being driven by its lower-end Curve products. This in turn puts pressure on RIM’s average device selling prices.

RIM is expected to report fiscal first-quarter results on June 28. The company said it added about 1 million subscribers in the quarter ended June 2, its lowest total since the November quarter in 2007.

$1=$1.04 Canadian Reporting By Euan Rocha, Jon Cook and Alastair Sharp; Editing by Peter Galloway

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