Jimmy & MLSE: the pain of knowing what could have been

Like every shareholder of Research In Motion (RIM:TSX), Jim Balsillie, our favourite CEO, has suffered during the past 24 months. But Jimmy’s been particularly hard done by.

There is the annoyance of missing the Winnipeg NHL franchise purchase, of course. But more troubling must be the missed opportunity that results from the 54% drop in RIM’s share price since the Make It Seven initiative fell apart (see prior post “Make it Seven part 4” May 15-09) around $86.90 per RIM share.

The stock swoon represents about $1.375 billion of paper losses to Jim (if the 2010 Proxy is still accurate), which isn’t all that more than what it would have cost him to acquire 66% of Maple Leafs Sports and Entertainment from the Ontario Teachers’ Pension Plan Board two summers ago (see prior post “Jimmy’s time has come” Dec 1-10).

Using the wonders of those funky forward sales, Jim could’ve transferred over, tax free, enough RIM stock to make OTPPB happy, control the team of his dreams, avoided this meltdown to $39, and the value of his RIM stake post-Leafs purchase would have been the same as it has ultimately become.

Sad, but true. As my Mom would have said: follow your dreams.

MRM
(disclosure – I own RIM)