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Subject:  Some are buying Date:  11/14/2011  5:23 PM
Author:  newsreporter Number:  2302 of 2379

What Does Leon Cooperman See in RIM?

But even as some investors flee the company, others are lining up to take a stake in it. The latest to do so: Leon Cooperman, the billionaire former head of Goldman Sachs’ asset management arm and founder of hedge fund Omega Advisors.

Earlier this fall, Omega bought about 1.4 million shares of RIM — inexplicably, some would say.

Why is Cooperman so interested in a company that lost 1.8 million of its U.S. subscribers to other platforms in the past three months, according to comScore, and whose shares fell below book value earlier this month?

Two reasons.

First, RIM’s new QNX operating system is promising. “People think [RIM] is a melting ice cube,” Cooperman told Bloomberg. “We think the new operating system is going to surprise people.”

The second: the possibility of a merger. “Why do people buy a stock?” Cooperman observed. “They buy a stock because they think it is undervalued. The merger value is worth more than the market value.”

In other words, RIM’s stock is undervalued, and the company is headed for a rebound. Risky bet? We’ll find out on Dec. 15, when the company reports third-quarter earnings.

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