Shares of Research In Motion Ltd. are climbing on rumours that the BlackBerry maker may be bought by software giant Microsoft Corp.

RIM shares set a new trading record by rising as high as $89.68 (up $2.88) in late morning trading on the Toronto Stock Exchange. By the close, the stock has fallen back to $87.62, up 82 cents.

RIM 3-month trading chart

"Microsoft has been mentioned as a possible buyer," Frederic Ruffy, an analyst at options education firm Optionetics, told Reuters. "According to speculation, the software giant might be interested in RIM in response to Google's recent announcement that it is interested in making its own mobile phone operating system, which would compete with Windows Mobile."

A number of analysts were quick to splash cold water on the rumours.

"We're hearing the same rumour everyone else is, the Microsoft and RIM rumour,'' Steve Sachs, head of trading at Rydex Investments in Rockville, Md., told Bloomberg. "I can't even count the number of times we've heard that over the last three years.''

A RIM Blackberry displays the Microsoft homepage.
(J.P. Moczulski/Canadian Press)

Both Waterloo, Ont.-based RIM and Redmond, Wash.-based Microsoft declined to comment on the rumours. RIM's current market capitalization is about $48 billion, which would make a purchase of the company expensive. Microsoft, however, has deep pockets.

Industry analysts have pegged Microsoft at a disadvantage in the cellphone market against its two main rivals, Apple Inc. and Google Inc. Apple entered the mobile market in June with its iPhone, while rumours continue about Google doing the same with a possible announcement as early as next week.

Google has announced it will "probably" buy wireless airwaves in a U.S. auction next year with an eye to getting into the cellphone market.

RIM is Canada's technology darling. In late June, the company reported first-quarter revenue of more than $1 billion US for the first time, as well as a profit increase of 73 per cent to $232.2 million US ($1.17 US a share). A 3-for-1 stock split also took effect on Aug. 20.

RIM said it added 1.2 million BlackBerry subscribers in the quarter, bringing its total base to more than nine million.

The takeover rumours helped spark a rise in the Canadian dollar, currency traders said. The loonie was quoted at 93.90 cents at 9:30 a.m. ET, but jumped three-quarters of a cent to 94.65 cents US by 2 p.m. ET. 

According to a regulatory filing in June, no shareholder owns more than 10 per cent of RIM's 186 million shares outstanding.

Co-CEOs Jim Balsillie and Michael Lazaridis are big owners, holding 11.8 million and 12.4 million shares, respectively.