Fairfax Financial CEO Prem Watsa doubled down on his investment in Research in Motion (RIMM). Now he owns 9.9% of the company. Very few investors can compete with Watsa’s astounding investment track record and this investment in RIMM is substantial. I do not believe he would make this bet just believing the company is likely to regain market share with its Blackberry 10 introduction next year. I believe that this scenario creates his call option value, but I believe that he sees value in the net cash and patents, far beyond the current share price. Obviously this liquidation analysis is reliant on the company not burning through its cash horde investing in a floundering technology. Consumer technology is a very difficult business to invest in and both Watsa and I have lost money on RIMM thus far. While the stock is much cheaper and we have added a few months back, I’m not willing to invests as big on RIMM because I believe there are more variables than I traditionally look for that can impact the investment. Watsa is big enough that he can become the controlling shareholder and impact capital allocation decision which in my opinion reduces the risk for him dramatically, and helps all shareholders out. Hopefully he get’s involved aggressively soon.
http://www.gurufocus.com/news/183328/prem-watsa-doubled-down-on-researchinmotion-again