TORONTO Shares of Research Motion Ltd RIM.TO rose over 3 percent on Wednesday as investors focused on a move by a U.S. fund manager to expand its holding in the smartphone maker ahead of next year's launch of the make-or-break BlackBerry 10 line.
Yacktman Asset Management Ltd more than doubled its stake in RIM to 23.47 million shares, up from 11.24 million shares at the end of June, according to a filing with the U.S. Securities and Exchange Commission early this month. RIM has 524.16 million shares outstanding.
The investment stands as another vote of confidence for the embattled smartphone maker as the company prepares to launch its new line early next year. The BB10 will vie against Apple's (AAPL.O) iPhone and Android-based smartphones, which have decimated BlackBerry's market share in recent years.
"Anytime you're got somebody taking an active stake, I think people will say at least there's some buying support," said James Faucette, an analyst with Pacific Crest Securities in Oregon.
"I think, generally speaking, the stock had gotten beaten up the last couple of days," he added. "Whatever you think is going to happen, good or bad, probably primarily hinges on BlackBerry 10."
The rise on Wednesday followed a surge in the share price last week on growing optimism about a successful BB10 launch, fueled by a show of support by industry analysts.
But there was a hiccup on Tuesday when the stock retreated 10 percent on a research report saying RIM's share of the U.S. smartphone market had dropped to 1.6 percent from 8.5 percent a year earlier. That compared with Apple's 48.1 percent share, according to the report by Kantar Worldpanel.
Weighing against the gains on Wednesday, an arbitration panel ruled against RIM in a patent dispute with Nokia Oyj NOK1V.HE. The decision has the potential to lead to a halt in the sale of RIM products - should the Canadian company fail to reach a new royalty deal with the Finnish company.
A source close to RIM said the arbitration ruling was unlikely to have any immediate ramifications, as Nokia still has to fight a number of legal battles for the arbitration panel's ruling to be recognized in different countries.
Analysts said RIM would likely seek a royalty agreement with Nokia to avert any risk of sale bans.
The Swedish panel ruled RIM was not entitled to make or sell mobile devices which can hook up to WiFi networks - using technology known in the trade as WLAN or wireless local access network systems - without first agreeing royalties with Nokia.
RIM's shares rose 38 Canadian cents to C$11.08 in late Wednesday afternoon trading on the Toronto Stock Exchange. On Nasdaq, the U.S.-listed stock was up 3.1 percent at $11.05.
(Reporting by Julie Gordon and Alastair Sharp; Editing by Frank McGurty and Tim Dobbyn)