Newspaper article The Canadian Press

Shares in Research in Motion Jump 17%, but Analysts Still Guarded on Future

Newspaper article The Canadian Press

Shares in Research in Motion Jump 17%, but Analysts Still Guarded on Future

Article excerpt

Research In Motion stock jumps 17%

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Shares in Research In Motion spiked dramatically Thursday after days of steady gains, but analysts were still guarded about the potential success of the BlackBerry maker's new operating system.

On a day when the U.S. markets were closed, shares in Research In Motion surged 17.3 per cent to close at $12, up $1.77, its best performance in months on the Toronto Stock Exchange.

Telecom analyst Troy Crandall predicted, however, that the BlackBerry 10 operating system has only a small probability of successfully taking consumers away from Apple and Android devices when it's released in early 2013.

"It's not that we're super hopeful that this is going to work out," said Crandall, of MacDougall, MacDougall & MacTier.

"There is hope being built in that there's a chance it could work out."

RIM's new BlackBerry 10 operating system -- which will be unveiled at a Jan. 30 event along with its new line of smartphones -- is widely considered a make or break product launch for the Waterloo, Ont., smartphone maker.

Crandall said he doesn't consider it normal that shares in Research In Motion (TSX:RIM) surged 17 per cent in a single day.

"Stocks should not have this type of volatility unless there's something extraordinary going on below the surface," he said.

"I think that's really what you're getting and a lot of that is coming from the short selling and it's magnified by the fact that the U.S. markets are closed."

Investors could be in for a "nasty little surprise" on Friday, when RIM shares will likely go up on New York's NASDAQ exchange, he said. More RIM shares are traded on the NASDAQ, and it's rare for a single stock to rise by 17 per cent on that exchange, Crandall said.

A more modest gain on the NASDAQ will likely pull down the price in Toronto, he added.

He said 95.3 million, or just more than 18 per cent, of RIM's 524 million outstanding shares are held by short sellers, who have essentially bet against RIM and lose money when the company's stock goes up.

"I think a lot of the short sellers are starting to get scared or they're actually just basically cancelling out their position, which means they have to buy it back which adds further upward pressure to the stock. …

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