Canada’s answer to Warren Buffet feasts himself on shares
Someone obviously believes Research in Motion has a future. Toronto-based Fairfax Financial Holdings has become the struggling manufacturer’s single biggest shareholder after doubling its stake. From a four year high of around $148 RIM’s share price has plunged massively to around the $6 – $7 mark prompting speculation that the company could be doomed.But unexpectedly yesterday Fairfax, a financial services group run by the Canadian tycoon Prem Watsa, doubled its stake in its stake in the BlackBerry maker to 51.9 million shares, or 9.9 per cent, worth about $351 million.
Behind the move might be speculation that RIM is ripe for takeover.
Although the Blackberry has been knocked off its perch by Apple’s iPhone and Google Android handsets, RIM does still boast a vast library of 11,000-plus patents, 78 million subscribers and 56 million BlackBerry Messenger users, all of which could provide any potential buyers (including Apple, Google and Microsoft) with strategic leverage.
Microsoft alone, which is struggling to find its way in the mobile domain, would gain a high quality beachhead into smartphones.
All of which might behind the thinking of Mr Watsa who himself is on the board of RIM, having joined in January as part of a management overhaul that coincided with the resignation of RIM’s co-chief executives, Jim Balsillie and Mike Lazaridis.
Until now the RIM board have resisted pressure to sell or dismantle RIM, pinning their hopes on a new but delayed operating system early next year called BlackBerry 10.
Earlier this year Prem Watsa, dubbed the Warren Buffet of the North, reminded investors that RIM remains the top-selling smartphone in many markets and has more than $2bn in cash and no debt.
As noted by GoMo News a fortnight ago (see here), RIM’s current ultra low share price could prove to be a sound investment after all.
[Editor's note: Why is there no photo of Barbara Stymiest on the RIM web site alongside other execs' pictures?]