Fairfax Financial Holdings Ltd., the insurer run by Canadian investor Prem Watsa, doubled its stake in Research In Motion Ltd. after Watsa joined the board of the BlackBerry maker.
Fairfax owns 26.85 million shares of Research In Motion, up from 11.8 million shares in September, according to a filing with the U.S. Securities and Exchange Commission Friday.
The company raised its stake to 5.12%, worth about $437 million based on Thursday’s closing price.
Watsa was named a RIM director on Jan. 22 as part of a management shakeup that included the replacement of co-Chief Executive Officers Jim Balsillie and Mike Lazaridis with former operating chief Thorsten Heins. The largest shareholder in RIM is Primecap Management Co., according to data compiled by Bloomberg.
RIM shares have plunged 5.6% on the Toronto Stock Exchange since Jan. 20, after Heins told investors there isn’t “drastic change needed.” RIM’s share of the smartphone market tumbled to 11% in the third quarter of 2011, from 21% two years earlier, according to Gartner Inc.
RIM fell 0.8% Thursday to $16.28 on the Toronto Stock Exchange, for a market value of $8.53 billion.
Toronto-based Fairfax bought 6.5 million shares on Jan. 25 and another 7.6 million shares Thursday, according to the filing.
Born in Hyderabad, India, Watsa has built Fairfax by investing in the assets of out-of-favor securities, and said this week he may increase his stake in Waterloo, Ontario-based RIM. Shares of RIM, once Canada’s most valuable company, have lost 74% of their value in the last year.
Watsa, 61, founded Fairfax in 1985 and has patterned his style of value investing after Warren Buffett, recommending shares of companies such as Wells Fargo & Co., Johnson & Johnson, Kraft Foods Inc. and US Bancorp.
Fairfax benefited from declines in U.S. banks during the financial crisis, purchasing credit-default swaps on lenders. The swaps, instruments based on bonds and loans that are used to speculate on a company’s ability to repay debt, led to investment gains of $2.72 billion in 2008.
Watsa has shifted in recent years to investing in U.S. municipal bonds backed by Buffett’s Berkshire Hathaway Inc.