Primecap Management Co. doubled its stake in Research In Motion Ltd. (RIM), making it the Blackberry maker’s biggest outside investor in a move that may signal its confidence the company’s shares are poised to recover.
Primecap now holds 26.4 million shares, or 5 percent of RIM’s outstanding equity, RIM said in a regulatory statement today. That gives it a stake of about $617 million, based on its closing share price Aug. 5. Primecap had a stake of 2.5 percent at the end of the second quarter, according to data compiled by Bloomberg.
Primecap’s move comes as Waterloo, Ontario-based RIM tries to recover market share lost against Apple Inc. (AAPL) and phones built on Google Inc. (GOOG)’s Android software. RIM introduced three new phones built on a faster operating system last week as it races to transition its whole range of phones onto a new platform next year.
RIM’s share of worldwide smartphone sales dropped to 12 percent in the second quarter from 17 percent a year earlier, according to Framingham, Massachusetts-based researcher IDC. Over that time, Apple climbed to the top spot with a 19 percent share, up from 13 percent. Samsung Electronics Co., which builds Android phones, tripled its share to 16 percent from 5.6 percent a year earlier, according to IDC.
RIM fell $1.52, or 6.5 percent, to $21.87 at 4 p.m. New York time in Nasdaq Stock Market trading, its lowest level since August 2006. The stock has lost 62 percent of its value this year. The Standard & Poor’s 500 Index tumbled 6.7 percent to 1,119.51, extending its biggest slump since 2008’s bear market.
Co-chief executive officers Jim Balsillie and Mike Lazaridis are RIM’s two biggest investors with stakes of 5.9 percent and 5.4 percent respectively, according to data compiled by Bloomberg. Primecap surpasses Mclean Budden Ltd. as RIM’s third-biggest investor.
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