Cooperman on RIM: “We’re Hoping They’ve Seen the Worst”
Earlier this month, Leon Cooperman’s Omega Advisors raised a lot of eyebrows when it bought about 1.4 million shares of Research In Motion. The purchase, made when RIM’s shares were trading at seven-year lows, seemed curious, even inexplicable, at the time.
So why did Omega take a position in RIM, when other investment advisory firms are fleeing the company? Brookside Capital Investors, Janus Capital Management and Greystone Managed Investments, for example, have all unloaded their shares in recent months.
In an interview with CNBC this week, Cooperman explained his rationale. Short answer: Omega’s position in RIM is quite small — less than 1 percent of the firm’s total portfolio. And RIM could rise again when it finally gets its new QNX operating system. It’s still got a hell of a user base.
“We think the new operating system is constructive,” Cooperman told CNBC. “RIM has over 70 million users. … There is tremendous intellectual property and the possibility they could resurrect themselves and go on a better track. We took a speculative position.”
In other words, RIM may well be a value purchase right now. So why not make a small bet?
“Hopefully we’ll develop greater conviction after they come out with results in December,” said Cooperman. “We’re hoping they’ve seen the worst.”