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The BlackBerry logo is in front of the company’s B building in Waterloo, Ont in 2018

Investors from opposite ends of the spectrum find common ground with BlackBerry Ltd, (BB-T) as the tech company’s recent online craze is adding to the fortunes of longtime backer Fairfax Financial Holdings Ltd (FFH-T)

In addition to the large institutional shareholder, there are individual retail investors, many of whom congregate on sites such as Reddit, have acquired stakes in BlackBerry and the retailer GameStop Corp in the past few weeks. Funds that sliced ​​its stock and were spurred on by unsupported online claims propel stock prices soaring.Blackberry stock has quadrupled since early January, bringing the Waterloo-based company worth more than $ 18 billion. Brings in dollars

GameStop shares accumulate for another day as the total volume exceeds the number of tradable shares

Fairfax, headquartered in Toronto, became a cornerstone of BlackBerry back in 2013 when the insurer and asset manager refinanced convertible bonds worth 1 billion USD headed BlackBerry stock was trading at $ 6 at the time. Fairfax joined John Chen’s vision of turning the former smartphone maker into a software company and Fairfax’s founder and CEO, Prem Watsa, a well-known value – Investor, became lead director on the BlackBerry board

Until recently, Fairfax had little to prove as BlackBerry’s share price has moved largely sideways for the past seven years.This has changed in the last few weeks as investors started talking on forums like Reddit’s WallStreetBets, stacked in BlackBerry, Exchanging stock market tips, partly due to speculation that the company will become a leading software provider for autonomous vehicles Two years ago, BlackBerry entered into a partnership with the Chinese company Baidu to develop autonomous driving systems

Fairfax owns 467 million BlackBerry shares and bonds convertible into an additional 50 million BlackBerry shares for $ 6 each, a total of 17.4 percent stake in a report this week, the analyst at Scotia Capital said , Phil Hardie, that for every $ 1 increase in BlackBerry stock price, more than $ 6 per share, Fairfax will earn $ 100 million before tax

BlackBerry shares closed Wednesday at $ 2510 on the New York Stock Exchange, up 33 percent during the session

“We believe the setup is in place for Fairfax to deliver a number of quarters of big investment returns,” said Mr Hardie said the analyst said at its best, Fairfax’s stock price could rise more than 50 percent this year if “Fairfax keeps recent BlackBerry profits close to current market prices by hedging or monetizing them”

Fairfax declined to comment on its BlackBerry stake on Wednesday, as yet there are no regulatory records showing that Fairfax benefited from any of its seven-year-old BlackBerry investments, a number of Bay Street analysts warned this week that BlackBerry’s business outlook does not support current stock price

“Movement in BlackBerry stock appears to be exaggerated in the short term given the fundamentals of the business relative to movement in the underlying stock price,” a report by Bank of Nova Scotia analyst Paul Steep said on Wednesday at US $ 850 One Year Target Price for BlackBerry He said, “The recent appreciation in BlackBerry stock appears to be being driven by retail investors who focus on a handful of stocks and use a combination of buying short-term call options and the underlying security”

Mr Steep said that while BlackBerry has promising technology and a strong track record that will help it weather the pandemic, “We’d have to see a significant improvement in the company’s performance in its software businesses to make its stocks more constructive.”

The rally in BlackBerry stocks, while impressive, pales in addition to the recent run at GameStop which has video games over a network of more than 5000 stores sold GameStop stock rose 134 percent Wednesday, closing at $ 347 on the New York Stock Exchange after starting the year at $ 18 The retailer is now valued at $ 24 billion, which roughly corresponds to the total value of the two largest grocery chains in Canada: Loblaw Cos GmbH and Sobey’s mother Empire Co GmbH

A number of US. Hedge Funds that previously shorted GameStop – betting that the company’s shares would fall if it battled rivals like Amazoncom Inc – closed their short positions last week after suffering significant losses

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BlackBerry stock price

World News – CA – Fairfax poised to make big gains if BlackBerry shares rise

Source: https://www.theglobeandmail.com/business/article-fairfax-poised-to-record-large-gains-as-blackberry-shares-soar/