Research In Motion Ltd.'s volatile shares leaped yet again in Friday trading as investors found one more reason to believe in the BlackBerry maker's comeback narrative – or at least a reason to believe in short-term profits from it.
The impetus for Friday's 7 per cent jump on the Toronto Stock Exchange, like other jumps before it, was research from a bank analyst. Jefferies & Co.'s Peter Misek, in a note to clients, upgraded RIM to a "buy," raised his price target from $13 (U.S.) to $19.50 and said RIM has a better near-term shot with its new BlackBerry 10 phones than most people realize.
Mr. Misek also wrote that investors don't fully understand that RIM's new software will enable IT departments at major corporate and government departments to handle iPhones and Android devices in addition to BlackBerrys.
That comment, combined with a suggestion that RIM might license its popular but proprietary BlackBerry Messenger service to rivals, prompted a flurry of vague news reports that
RIM was basically going to let Apple Inc. and Google Inc. have RIM's prized e-mail functionality.
Mr. Misek said his main point was that investors didn't know that RIM's new software can help IT departments handle iPhones, and that investors were not paying sufficient attention to the potential strength of RIM's software business.
"They can be niche," Mr. Misek said in an inteview. "And then their hardware doesn't need to go head to head with Apple."
Friday's trading capped off a week-long rally that comes amid a broader, four-month burst of momentum for RIM in the lead up to the Jan. 30 launch of BlackBerry 10, its upcoming smartphone platform, which has been delayed several times. Since late September, RIM shares have climbed from about $6.18 to $15.71 (Canadian) on the hope that the first smartphones running BlackBerry 10 software – including a full-touchscreen device – will halt declines in BlackBerry sales, stabilize the business and put RIM in a better competitive position in a wireless marketplace crowded with sleek phones from Apple and Samsung Electronics Co.
Over the past two years, RIM's aging lineup of BlackBerrys has gradually lost market share to rivals in many developed countries.
The BlackBerry's popularity in vast emerging markets, however, has led to strong sales that have helped RIM's management stickhandle a worsening financial situation over the course of 2012.