Fairfax's Watsa raises RIM stake to nearly 10 percent

Mon Jul 23, 2012 10:52am EDT
 
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TORONTO (Reuters) - Canadian investor Prem Watsa, dubbed the "Warren Buffett of the North," has nearly doubled his company's stake in embattled BlackBerry maker Research In Motion Ltd RIM.TO RIMM.O to just under 10 percent, according to a regulatory filing.

The move makes Watsa, chief executive of insurer and investment company Fairfax Financial Holdings Ltd (FFH.TO: Quote) and a RIM board member since January, the largest known shareholder of the Canadian company whose market value has dropped nearly 80 percent over the past year as its share of the smartphone market has tumbled.

Shares of RIM rose 8 Canadian cents to C$6.94 in early trade on Monday on the Toronto Stock Exchange.

Analysts said the increased investment by Watsa has more to do with his long investment horizon and desire to bring down the cost of his initial investment in RIM than a bet on making a quick buck on a takeover of the BlackBerry maker.

"He said that he's looking to average down (his cost) and their investment horizon is normally three to five years -- they are not looking for a quick turnaround," said Sameet Kanade, an analyst at Northern Securities in Toronto.

In upping its stake, Fairfax reaffirmed its support for RIM's new chief executive, Thorsten Heins, and its new BlackBerry 10 device, on which the company is betting heavily. The BlackBerry 10 is due out early next year.

"We have taken the recent opportunity to average down our per share cost and we believe that we are now the single largest shareholder of RIM at just under 10 percent," Fairfax spokesman Paul Rivett said in an email.

"We strongly believe that Thorsten Heins is singularly focused on the success of RIM and its BB10, and we firmly support him and the entire BlackBerry team working tirelessly to bring this exciting new platform to market."

LONG-TERM PERSPECTIVE   Continued...

 
Research in Motion (RIM) BlackBerry smartphone handsets are pictured in this illustration picture taken in Lavigny, July 21, 2012. Picture taken July 21, 2012. REUTERS/Valentin Flauraud