Research In Motion Ltd's move to hire bankers for a strategic review and scout for partnerships prompted a slew of price-target cuts from analysts, who were skeptical about the BlackBerry maker's ability to attract a buyer.
The company on Tuesday said it hired bankers from J.P. Morgan Securities LLC and RBC Capital Markets to help evaluate its strategies.
"A potential buyer remains uncertain, and potentially a long shot in our judgment," analysts at Robert W. Baird said, adding they would be surprised by an acquisition by an existing OEM.
"Microsoft is likely to be rumored, though given its focus on Windows 7 and 8, that seems increasingly unlikely to us," they said.
BMO Capital Markets, which too cut its price-target on the stock to $9 from $11, does not see a buyer either for the device business or the network business.
The Waterloo, Ontario-based company is struggling to retain its top talent after a series of high-level executive departures in recent weeks, and now finds itself struggling in the smartphone market, trailing Apple and other rivals.
"We continue to remain cautious on RIM and are reducing our estimates ... We believe that the company's integrated strategy is too far behind Apple's," Wedbush Securities said in a note.
However, JMP Securities upgraded RIM stock to "market perform" from "market underperform" after the company issued the cautionary update, largely based on valuation.
RIM's U.S.-listed shares were down 8 percent at $10.29 before the markets opened on Wednesday. They closed at $11.23 on Tuesday on the Nasdaq.
(Reporting by Fareha Khan in Bangalore; Editing by Sreejiraj Eluvangal)