[Mr BBRY]

I'm now turning my attention towards BBRY again in a big way, I have always held a strong position in it but now I want to buy a monster block and write calls against that position on bounces and breakouts. I'll post my trades when I have them completed, likely to be a big block of naked put writing starting as early as next week to go along with my shares additions last week. Love this market.

Ya know, for the first time I said to myself, "there's no way Morgan is going to be right this time", after reading the above quote. I thought for sure we wouldn't last very long in the $9's, but it looks like there Morgan will have it his way once again. On a day with the Dow is up 175 points, it's crazy to see BBRY down 1%. I'll be following his lead and backing up the truck if we hit our lowest intra-day low in about 3 months of $9.50. Have a great day and good luck, gang!

[spiller]

OT: USO at year low and 6 year lows?

What is the best way to look for the bottom? I feel this has to be a good time to start averaging in, at least.

[rarsen]

OT from the Related Technologies and Security files:

Has Apple lost its religion of simplicity? | ZDNet
From a product standpoint, the Apple Watch is a bit of a mess, honestly. I'm sure it will become less of a mess over time -- it is still a 1.0 product -- but the fact that Apple released the product in its current form says something. In fact, it says a lot about Apple under the new leadership regime because it's the first new product category of the Cook-Ive era. And as far as innovation and discipline goes, this is a wobbly start.
The Apple Watch tries to get there all at once. And as a result, it's too complicated and convoluted. You have to operate it using two different buttons and one of the buttons has two different functions -- pushing and turning. When Apple enters a new product category, it tries to bring a level of polish and simplicity that improves on the products that are already out there. I don't think we can say that with the Apple Watch. The company could thrive for a decade by incrementally improving the strong product line. The Apple Watch, on the other hand, is a creation of the new regime at Apple. And it has a lot more to prove. So far, it's failing an important test.
And we didn't speak of the battery life.

[_dimi_]

Equal to the CEO having to stay 'quiet' in the weeks leading up to ER, analysts should be obligated to do the same. I'm not saying they're right or wrong, but coming out with these reports NOW is not helping anyone besides (perhaps) themselves.

Posted via CB10

[morganplus8]

OT: USO at year low and 6 year lows?

What is the best way to look for the bottom? I feel this has to be a good time to start averaging in, at least.

Spiller,

The only thing you can do is look at the RSI for this trade, it is currently at RSI=30 right now and typically dips below that mark to an extreme oversold position. I would say something around $ 15.00 plus of minus $ .25 would be your entry position. Oil is crashing right now and we have ships sitting off shore with no where to dump their product so be careful here. The chart looks awful but it is oversold starting today.

[Corbu]

Faucette at it again...

[bbjdog]

Morgan Stanley out with a terrible note. Warning only click if nothing bugs you.
Read the link and it tells you everything.

BlackBerry Ltd (NASDAQ: BBRY) Sales Not Even Close, Says Morgan Stanley | Benzinga

[jake simmons3]

Morgan Stanley out with a terrible note. Warning only click if nothing bugs you.
Read the link and it tells you everything.

BlackBerry Ltd (NASDAQ: BBRY) Sales Not Even Close, Says Morgan Stanley | Benzinga

just seen this well we know who wants cheap shares

[bbjdog]

just seen this well we know who wants cheap shares

I also want the shares, guess MS and I have to fight over them.

[Corbu]

MORGAN STANLEY & CO. LLC
James E Faucette

March 16, 2015
BlackBerry Ltd
At This Rate, It Won’t Even Be Close

Industry View: Cautious
Stock Rating: Underweight
Price Target: $7.00

Initial software sales are sporadic while some VARs and resellers are dropping BlackBerry from lineup, and initial BlackBerry Classic sales are not tracking anywhere close to where they likely need to be.

Early conversions from EZ Pass small and insufficient to retain some VARs and resellers. Most of the early cases of EZ Pass conversion to paying support seem to have been small deployments (many times to support just a few BlackBerry devices that remain within a larger BYOD environment) or by customers retaining Blackberry as their primary mobility device (becoming an increasingly rare breed). Worse, we received feedback describing BES12 support for Android and iOS devices as “patchy” and found customers complaining of poor communications regarding the support expiration that took place last month. We think customer defections post-EZ Pass could prove to be as high as 50% and our conversations have not at all pointed to the broad upsell needed to get anywhere close to management’s target of $500M in software revenue in FY16. Further, we found a handful of cases where longtime VARs and resellers have decided since the beginning of 2015 to drop BlackBerry from their product lineup, and in at least one case, a reseller decided to drop BlackBerry in favor of Good Technology instead (which did about $212M in revenue in 2014 per SEC filings). Generally, resellers are finding BlackBerry to be a tough sell with large enterprise accounts looking for BYOD management, and deal sizes look unattractive, being largely limited to small businesses and niche use cases thus far. While management has said they would not expect a steep ramp in software revenue until mid CY15 given the long enterprise sales cycle, the lack of activity, poor feedback and reseller defections serve to reinforce our skepticism.

Even if BlackBerry recaptures enterprise users with software, the total mobile enterprise TAM hasn’t actually grown. While BlackBerry has staked its turnaround on substantial growth in its software business, we think competition from other EMM vendors combined with declining total enterprise spend on mobile devices, services and maintenance make reaching stated target of $500M in software revenue unlikely. Total spend on mobile device and content management software has grown almost entirely because of BlackBerry defections. In 2014 the total software revenue across key competitors including Airwatch, Citrix, Good and MobileIron probably only totaled about $600-$650M (See Exhibit 1). And we think that virtually all of the 20-30% growth in software revenue came from BlackBerry share losses. However, we estimate that the total number of subscribers that have paid-for mobile enterprise management globally (ex. Japan and China) has been roughly stable at 30-32M subs since 2010-2011. And taking into account reduced spending on devices and extra service fees to carriers (the BlackBerry surcharge often paid by companies to carriers has largely been phased out since 2011), the total amount spent by organizations on that relatively stable number of fully paid-for enterprise mobile enterprise subs (ex-Japan and China) has likely fallen by as much as $1B during that time—hard to grow a business to a nearly $1B/year run rate in a market where organizations are spending less and competitors have a head start.

Initial Classic sell-through looks well below breakeven rates. Our checks over the first couple of weeks of the Classic and Passport launches at major US carriers suggest BlackBerry may have sold through as many as 8,000 devices. Although in the early innings, our initial sell-through estimates are well below the run rate needed to hit the 2-3mm Classics during of FY16 we estimate will be needed for the company to reach total device sell-through of ~10mm we believe will be needed to reach breakeven with hardware during FY16. We are seeing very little demand for Passport where it is stocked.

Reducing estimates. To account for the slower and later than expected launch of the BlackBerry Classic, we are forecasting 1.5m total devices to be sold through in the February quarter (down from 1.8mm) while our FY16 forecast is now 5.4m units (down from 6.6mm). Our new revenue and EPS estimates for 4Q15 and FY16 are $727.6mm / ($0.07) and $2.61b / ($0.38) (from $783.6mm / ($0.06) and $2.73b / ($0.36) respectively) on account of lower device revenue while our software forecast remains intact.

Reiterate underweight with a $7 PT. Initial sell-through of the Classic and Passport confirm our belief that BlackBerry will need to generate substantial growth in software revenue to justify its current valuation. We believe that to justify the current EV of ~$4.0bn, the company needs to get to ~$1bn in annual revenue from software and messaging using a generous 4x EV/revenue valuation multiple (management has been decreasingly willing to reiterate its $100M messaging revenue in FY16 commitment, in part because of uncertainty of how messaging revenue will be shown in the PD&L). We think that the company is preserving assets (and hence optionality) well—the company still has room for additional headcount reductions if needs be—and that an implied EV of $2.5bn at $7 on the company eventually (2-4 years) being able to build a $600mm/yr software and messaging business seems reasonable to us.

Price Target $7
~1.5x Price to Tangible Book Value at the end of FY16e (~5.5x EV/FY16e Software + Messaging Revenue)

Bull $19 2.0x EV/Bull Case CY15e Sales (4x Price to Tangible Book Value at the end of FY16e)
Meaningful traction of new products. New BES 12 platform and BlackBerry devices gain share, dramatically slowing the erosion of the enterprise subscriber base (20% software growth, 15% devices growth). Combined with good response to new BBM monetization efforts, the company is able to return to earnings early in FY16 (first half of calendar 2015). The EV/sales multiple could expand to 2.0x from the current 0.8x as these positives are factored in. The company would no longer trade primarily on tangible book value and instead would start to trade again on growth based metrics.

Base $7
~1.5x Price to Tangible Book Value at the end of FY16e (~5.5x EV/FY16e Software + Messaging Revenue)
Continued cost optimization activities and slowing cash burn. The company arrests its cash burn and moves to cut OPEX further after poor response to its new BES 12 and BlackBerry devices, allowing it to reach and generally maintain cash flow break-even by the end of fiscal 2015 and into fiscal 2016 (early calendar 2015). The company maintains its current asset base, and associated multiple, at 1.5x tangible book value, maintaining turnaround optionality. Grows software & messaging business to a ~$430mm by FY16. 5.5x EV/16e software & messaging revenue comparable to other high growth software names.

Bear $2
0.7x Price to Tangible Book Value at end of FY16e
Failure to enact aggressive cost-cutting measures if new products fail. New management fails to take aggressive cost cutting even as new product launches flounder and subscriber base continues to erode pushing out cash flow break-even indefinitely. Net tangible book shrinks to the $3/share level by the end of May 2016 and the price/tangible book multiple falling with it, to 0.7x, yielding a value of $2.

Investment Thesis

• CEO Chen will aggressively cut OPEX to preserve assets, allowing for future optionality.
• Pressure will continue to mount on hardware platforms in the form of both lower pricing and lengthening life cycles, with value creation opportunities primarily in software.
• Company will be unable to gain relevancy in enterprise mobile management software market and will continue to lose enterprise subscribers.

Key Value Drivers

• Can the company stabilize its user base? We are skeptical.
• Will the company be able to achieve ~$600 software & messaging revenue in FY16? We think that number is ambitious as it implies significant ramp in subscribers and ARPU.
• Is there room for a third or fourth independent player in the MDM/messaging platform market? There are already more advanced vendors in the market with proven solutions for heterogeneous device environments.

Potential Catalysts

• Signs of success with its various turnaround initiatives.
• Hypothetical strategic value of the MDM/content management business to large enterprise equipment and/or software companies.
• Breakeven on hardware business.
• Stem losses in subscriber base.

Risks to Achieving Price Target

• Management isn’t prepared to further expand operating expense cuts.
• Free software, security advantages, and refreshed hardware aren’t sufficient to stabilize the user base.
• Liquidation of assets persists at below book values.

Morgan Stanley does and seeks to do business with companies covered in Morgan Stanley Research. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of Morgan Stanley Research. Investors should consider Morgan Stanley Research as only a single factor in making their investment decision.

[Corbu]

More...

Based on Company filings and our own estimates, we think at its peak, BlackBerry sold 10-12mm devices to its enterprise customers at an ASP of $200 with service fees of $10-$15 per device per month, while software revenue was roughly $260mm in FY11 (ex-QNX acquisition). Based on IDC data and our own estimates, we think enterprises currently purchase ~11mm non-BlackBerry devices annually at an ASP of ~$170. Our estimate of the current EMM software opportunity is 30-35mm users at an ARPU of $2-$4, based on BlackBerry’s current enterprise subscriber base along with financial data and commentary from MobileIron, Good Technology, VMWare and Citrix.

[bbjdog]

How funny to read MS note this morning, especially when Blackberry had good news this weekend!

[bspence87]

Lol, did they say BlackBerry has only sold 8,000 phones? Or was that just a typo in the Benzinga article?

Posted via CB10

[Corbu]

Is it me or is the latest Faucette "research" having relatively little effect on the SP?

Don't want to jynx it...

[bbjdog]

Lol, did they say BlackBerry has only sold 8,000 phones? Or was that just a typo in the Benzinga article?

Posted via CB10

Might have been a Typo or someone that was really angry. LOL

[jake simmons3]

so they see a possible upside potential for the stock to reach 19 doll hairs

[morganplus8]

Is it me or is the latest Faucette "research" having relatively little effect on the SP?

Don't want to jynx it...

I noticed that too, how many times can you kick that can down the road before it becomes so boring? Those numbers are wild guesses combined with their loyalties to other competition, I'll give them a pass. The stock is at support here, still following its uptrend line and not amused by this latest trash.

[masterful]

Might have been a Typo or someone that was really angry. LOL

Lol

#BBFactCheck

[bbjdog]

Lol, did they say BlackBerry has only sold 8,000 phones? Or was that just a typo in the Benzinga article?

Posted via CB10

They might be using this information linked below. LOL

https://www.zauba.com/import-blackbe...1-hs-code.html

[jake simmons3]

Lol

#BBFactCheck

I think each of us should spin up a word press blog and just pump out to most inaccurate stories about the competition. I think that would be pretty funny

[Corbu]

Samsung poised to forge even closer ties with BlackBerry

Samsung has hinted at further enterprise partnerships with BlackBerry as the South Korean electronics giant looks to strengthen the appeal of its devices and services to businesses.

The comments, made to CNBC by the head of Samsung's European enterprise unit on Monday, come just months after it shot down speculation that it was going to buy BlackBerry.

"I think you'll continue to see a rich roadmap with BlackBerry as we move forward," Lee Epting told CNBC at tech fair CeBit.

Since the takeover rumors died down, Samsung has been forging closer links with BlackBerry as the South Korean firm looks to take control in the enterprise market, and the Canadian device maker continues to switch its focus on to software and services.

BlackBerry announced this month that it was integrating two of its enterprise services – WorkLife and SecuSUITE – with Samsung's enterprise security software KNOX. WorkLife allows users to keep sensitive corporate information safe and separate from personal activities on a device. SecuSUITE is an anti-eavesdropping software.

By partnering with Samsung, BlackBerry can get its software into the phones of the world's largest device maker by shipments, while Samsung can market its smartphones as the best for business.

Samsung announced at CeBit on Monday that it was unifying all of its enterprise products such as KNOX and its printing unit under one brand called Samsung Business.

Epting said Samsung's ongoing expansion in the enterprise space will is not putting it in competition with BlackBerry.

"We have engaged with them ensuring we and they can support themselves. In that regard it's purely a partnership," Epting said.

[La Emperor]

Blackberry and Samsung getting cozier...

Samsung has hinted at further enterprise partnerships with BlackBerry as the South Korean electronics giant looks to strengthen the appeal of its devices and services to businesses.

The comments, made to CNBC by the head of Samsung's European enterprise unit on Monday, come just months after it shot down speculation that it was going to buy BlackBerry.

"I think you'll continue to see a rich roadmap with BlackBerry as we move forward," Lee Epting told CNBC at tech fair CeBit.

Samsung poised to forge even closer ties with BlackBerry

[BanffMoose]

Re Morgan Stanley analysis:

Interesting. I would have imagined that the EZPass to paid subscription would have gone directly through BlackBerry instead of a VAR or reseller. In the old BBOS days I could easily see companies going through VARs and resellers to renew subsciptions, but not in the post-2013 state of BlackBerry.

[Ment]

Lol, did they say BlackBerry has only sold 8,000 phones? Or was that just a typo in the Benzinga article?

Posted via CB10

It's talking about the AT&T US launch. Given in the first couple weeks many locations didn't even have stock and the state of Blackberry in the US that may not be a shock. Not common to see Blackberry here except in financial/political hub cities like NY, Chicago and Washington DC. I've only seen one Passport for example.

[bspence87]

It's talking about the AT&T US launch. Given in the first couple weeks many locations didn't even have stock and the state of Blackberry in the US that may not be a shock. Not common to see Blackberry here except in financial/political hub cities like NY, Chicago and Washington DC. I've only seen one Passport for example.

Lol. Then why did they mention the total worldwide target in noting that it was "well short of the target"?

Posted via CB10