RIM shares rally to a seven-month high as optimism builds
TORONTO (Reuters) - Shares in Research In Motion RIM.TO RIMM.O surged to their highest close in seven months on Wednesday, after Eric Jackson - a long-time bear on RIM's stock - penned an opinion piece on his now bullish stance on the BlackBerry maker.
Jackson, the founder of Ironfire Capital, in his article, said parallels drawn by some analysts between RIM and its now-defunct rival Palm are flawed, as Palm never really had the kind of installed subscriber base that RIM enjoys.
In his piece, published on Wednesday on the TheStreet.com, Jackson contends that RIM's new BlackBerry 10 devices - set to launch next month - have much better odds of success than Palm's Pre device, which failed to capture a following despite positive reviews on the device and its operating system.
Jackson, who was short RIM's stock for an extended period, argues that the positive sentiment building in RIM's stock ahead of the launch of the make-or-break devices is unlikely to dissipate in a hurry, as a large portion of RIM's 80 million subscribers are likely to upgrade to BB10 when the new devices are launched. Jackson said he now has a long position in RIM.
Shares in the company rose 5.6 percent to close at $13.31 on the Nasdaq - the stock's highest close since May 1. Its Toronto-listed shares rose 5.8 percent to close at C$13.14.
The stock has more than doubled in price since September 24, when the shares were trading slightly above the $6 level in both New York and Toronto. The wave of optimism around BB10 has in recent weeks been bolstered by a number of analyst upgrades on the stock.
RIM is betting that the devices, to be launched on January 30, will revive its fortunes, which have faded as in recent years as it has bled market share to Apple Inc's (AAPL.O) iPhone and devices powered by Google's (GOOG.O) market-leading Android operating system.
Waterloo, Ontario-based RIM says the new devices will be much faster and smoother than previous BlackBerry phones and will have a large catalog of apps. So far, feedback from both carriers and developers that have tested the devices has been largely positive.
(Reporting by Euan Rocha; Editing by Dan Grebler)