Tags: RIM | Shares | Icahn | Stake

RIM Shares Jump on Icahn Stake Talk

Tuesday, 27 Sep 2011 12:43 AM

 

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Shares of Research In Motion jumped more than 6 percent on Tuesday morning on market speculation that activist investor Carl Icahn had taken a stake in the struggling BlackBerry maker.

Traders "are saying Icahn has taken a stake, but nothing is confirmed," BGC Partners tech analyst Colin Gillis told Reuters, as the shares rose $1.42, or 6.5 percent, to $23.04 on the Nasdaq.

"What I've heard is that he'll be filing imminently that he's taken a stake, but I don't know that to be true," Gillis said.

Icahn's office and RIM were not immediately available for comment.

RIM once dominated the smartphone industry with its business-friendly devices, but it has struggled as Apple's iPhone and Google's Android software have gained market share, particularly in the United States.

Its shares have lost some 60 percent of their value this year, and the Canadian company has been the target of several investor attacks after a series of profit warnings and a botched launch of its PlayBook tablet computer. The PlayBook has proved to be far less popular than Apple's iPad.

"This is showing you what would happen to the share price if management changed," Gillis said.

A much smaller activist investor, Jaguar Financial, is talking to some of RIM's major shareholders about plans to empower RIM's board to look at options including spinning off patents or selling the entire company.

Jaguar took a position in RIM after another investor, Northwest and Ethical Investments, reached a compromise with management that postponed a vote on whether co-chief executives Mike Lazaridis and Jim Balsillie should remain as co-chairmen of the board.

Its depressed valuation at around four times earnings has prompted some analysts to consider a sale.

RBC Capital Markets analyst Mike Abramsky said last week that RIM remains a potential buyout target that could attract interest because of its proprietary messaging services, global subscriber base and strong patent portfolio. Abramsky valued a takeout at $30 a share.

By midday on Tuesday, some 27 million Nasdaq-listed RIM shares had changed hands, approaching the 30-day average of 27.7 million.

© 2014 Thomson/Reuters. All rights reserved.

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