08-27-14 02:52 AM
- I find this one amusing, since every time BlackBerry stock jumps The Motley Fool site is generally right on it with a post explaining why it's a fluke and why you should still avoid investing in it.
And then there was this today:
Now, I like the sentiment, but I still believe that there's a lot of work left to do. Most crucially, BlackBerry needs to show dramatically better BB10 adoption; 1.5 million sales per quarter is not going to cut it.
Even so, it's nice to see overall sentiment surrounding BBRY starting to improve...08-22-14 01:47 PMLike 3
Sure, they could become a software-only company, and prosper. But they'd lose that connection to people; the only people with a connection to BlackBerry at that point would be IT admins.
I think success in handsets could feed into success in software. Sure BES, Balance, and BBM might be available on other platforms, but the user will always get the best experience on BlackBerry hardware.08-22-14 10:41 PMLike 2
- The contributor of that article is a shareholder of BlackBerry, that doesn't take away any merit from that article, except that, readers may take it with a spoonful of salt.
Anyway all of us who are invested in BlackBerry know its true potential, hope it delivers to it and, more importantly, hope it finds buyers for its goods. The stock will take care of itself in due course of time.
Posted via CB1008-23-14 09:34 PMLike 2
My understanding today is that BlackBerry is very much tied to the handset business. Now I think Chen understands that needs to change and was one of his first thoughts on BlackBerry. But selling BES as a stand alone product hasn't been a very easy sell so far. BES with BlackBerry they can be competitive, but BES with Android or iOS... not so much as they have to pay licensing fees to be able to manage those devices and from what I've read BES doesn't do the best job at managing iOS or Android. So BlackBerry needs device right now to help them sell Services.
But I'll admit I don't really understand BBRY business model.....08-25-14 08:47 AM
- Congratulations to CEO John Chen, all the other members of his management team, and the staff left over at BlackBerry Ltd (TSX: BB)(NASDAQ: BBRY), for officially making it through the turnaround. No word on whether there’s going to be a party with cake at the company’s Waterloo offices, but it should still celebrate nonetheless.
Why am I so confident the company has turned the corner? Because ever since Mr. Chen took over, BlackBerry has been doing everything right. It turned its focus away from handsets in North America, choosing to focus on lower-priced phones for the developing world.
It sold off practically everything that wasn’t crucial to the business. It invested heavily in QNX, which continues to be a good growth vehicle. It raised capital, and has some very influential investors in its corner, including Prem Watsa, billionaire CEO of Fairfax Financial Holdings Ltd (TSX: FFH).
In short, it’s been a textbook recovery.
Does that mean you should rush out and buy the stock? I’m not sure, but here are three reasons why I continue to hold my shares.
1. New phone coming
Come November, customers are going to see a new BlackBerry phone on the shelves, called the Passport.
The phone has an interesting design. It’s bigger than a regular smartphone but smaller than a small tablet, dubbed a phablet. It has a physical keyboard, because the company knows that’s a huge differentiating factor compared to its competitors. It also has the largest smartphone battery on the market, at least according to execs.
But will it be a hit? If you can predict that, you’ll make some money. All I know is that the last batch of new handsets the company released weren’t received well, so expectations are probably low. Even a modest success would move the stock higher.
2. Monetizing patents
BlackBerry is currently sitting on $1.4 billion worth of intangible assets on its balance sheet, which mostly consist of patents. Up until now, not much effort was made in monetizing them.
A few days ago, the company announced a whole new division dedicated to extracting value out of its patent portfolio, hiring a veteran tech executive to head it up. There’s no word yet on how profitable this new division will become, but it’s another step in the right direction. The best part? It’s a no-lose proposition. If it manages to extract value from the roughly 40,000 patents the company owns, it can only be good news.
3. Good recent results
Since Chen took over in November 2013, BlackBerry has done a terrific job reining in costs and selling non-productive assets.
In the company’s most recent quarter, Chen announced that it cut operating expenses by 57%, and actually increased the company’s cash hoard to $3.1 billion. BlackBerry’s cash on the balance sheet is approximately half of its market cap. Gross margins increased from 43% to 48%, and revenue was pretty much flat year-over-year.
Plus, the company gets the edge of having low expectations. Investors don’t expect it to do much, meaning whenever the company beats expectations it should get a bigger boost than any of its competitors.
Just because BlackBerry is no longer at risk of going bankrupt it doesn’t mean the hard work is over. The company needs to continue the momentum in its QNX software division, and actually have a successful new handset launch. But expectations are so low that even a modest success could send shares higher.
Still, I’d be patient before adding shares. It’s such a volatile stock that investors could easily see it 10-20% lower.
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Last edited by VR6; 08-28-14 at 01:04 PM.08-27-14 02:52 AM
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