Research In Motion is increasing its previously announced public offering of shares as the company soars following solid earnings.
The Waterloo, Ontario-based company said it will sell 10.5 million shares to the public instead of the 9 million it announced last week. Shares will be sold in the United States and Canada and will be completed on Jan. 21 with net proceeds approaching $789 million, RIM said Wednesday.
The company had about $360 million in cash and cash equivalents as of Nov. 29, 2003, the end of its third quarter.
Toward the end of last year, the BlackBerry device and service company reported 107 percent revenue growth for its third quarter as compared with the same period a year ago, rising from $74.2 million to $153.9 million, with profits of $16.3 million, or 20 cents per share.
RIM attributed the strong outcome to higher-than-expected subscriber growth, especially in Europe, and strong sales through its carrier channels. The momentum is expected to continue for the next two quarters.
Shares of RIM have been rising. Since the beginning of the year, shares are up nearly $10 from $69.24 on Jan. 2 to $79.21 at the close of business Thursday.
The company intends to use the proceeds from the offering for general corporate purposes, such as research and development, expansion of manufacturing capacities, expansion of global sales and marketing, and for working capital, according to a prospectus from the U.S. Securities and Exchange Commission. RIM may also use portions of the proceeds for acquisitions of or investment in technologies, products or businesses it deems complementary, but it does not have any agreements or commitments in place.
RIM faces a setback in litigation against it by holding company NTP, which won a ruling in a patent infringement case earlier this year. The awarded injunction by the district court has been stayed, pending an appeal RIM filed.