RIM shares gained more than six per cent to trade at $11.70 on the Toronto Stock Exchange at midday on Thursday on heavy volume.
A Goldman analyst who covers RIM changed his rating from 'neutral' to 'buy' because he says he now thinks the company's BlackBerry 10 line of smartphones slated to be released in the new year has a realistic chance of success.
"We now assess a 30 per cent chance of success for BB10 given positive early reviews, broad based carrier support, attractive features, and interest by carriers and consumers in broadening the field behind Android-iOS (Apple)," the bank said.
The brokerage raised its 12-month price target to $16 from $9.
Good news for company
That good news came on the heels of giving up ground on Wednesday after Finnish phone maker Nokia Corp. asked courts in several countries to uphold a Swedish arbitrator's ruling that could prevent RIM from using certain patented wireless technology.
And on Tuesday, RIM shares gave back 10 per cent amid a report that BlackBerry's share of the U.S. market has fallen to just two per cent.
But that followed a week in which shares ran up dramatically on analyst optimism over the BlackBerry 10 phones' prospects. After all the activity, the stock has gained more than 75 per cent since bottoming at $6.31 in the middle of September.
The company's new line of phones appear to be driving much of the optimism, but Goldman notes that there are other market forces at play behind the scenes.
"Given that short interest in the stock is at an all time high of 20 per cent of shares outstanding, we believe short covering has contributed to the sharp bounce off the lows," Goldman Sachs said in its research note.
That means the bank thinks RIM shares have hit bottom and have nowhere to go but up, because all the investors who were trying to profit on a decrease in the share price have given up and moved on.