Toronto investor doubles RIM stake to become largest shareholder

Toronto investor Prem Watsa has nearly doubled his stake in struggling BlackBerry manufacturer RIM, according to a 24 July regulatory filing.

The Watsa-run Fairfax financial holding company is now RIM’s largest investor with 51.9 million shares of the company, estimated to be worth $351 million (£226 million). Fairfax now has a 9.9 per cent stake in RIM, up from 5.1 per cent in January.

Shares of the company rose by one cent (less than 1p) to $6.78 (£4.4) during trading on Monday after the announcement. It’s now valued at a paltry $3.6 billion (£2.3 billion).

It’s a risky bet on Watsa’s part, but the move gives RIM a much-needed vote of confidence, given that shares of the company have dropped 95 percent from their peak in 2008.

Shrinking sales and a growing irrelevance in a smartphone market led by Apple and Samsung are among the culprits for RIM’s downfall, but the company has outlined plans to bounce back with its BlackBerry 10 platform and a new line of handsets due to be released in early 2013.

Watsa, who has been a member of RIM’s board since January, told the AP in April that he believes the company will make a comeback over the next three to five years.

He also described its stock was vastly undervalued, an assessment that makes sense given RIM’s broad patent portfolio and subscription fees attached to its popular BBM messaging service.