[DaSchwantz]

Interesting Short Call Calendar Diagonal Spread Today in BBRY.
Someone bought 4400 Jan 2016 with a strike of $7 for about $162,000 or about $.37 each
The sold June 2016 with a strike of $6 for about $220,000
To explain in simple terms:

They essentially got about $60,000 by doing these 2 transactions (220K - 160K)

They have the right to buy 440,000 shares at $7 by Jan 2016
To pay for that right, they spent $160,000

They also sold the right to sell 220,000 shares of stock for $6 expiring in June 2016 . This means that someone who bought those calls can buy it from them at $6.
Since they sold this right, someone paid them $220,000

So why do it?
The investor hopes to make money from a sharp move in the price before Jan 2016 or a sharp move downward in implied volatility if the stock is essentially flat.
Their is risk here though this becomes a naked call after Jan 2016 assuming the stock has no move above $7 , and they will have to buy back the Jun 2016 call, whether they lose or not depends on what that call is now worth minus what they got ($60,000)

If the stock has a major move, say to $10 by Jan 2016.
They made money on the Jan 2016 (440,000 x $3 = $1,320,000)
The June 2016 probably can be closed out for say $4.25 (add the $6 strike minus the $10 and add as their is some time premium) so they spend $935,000

What they end up making in this scenario (purely hypothetical of course!) is about
The initial $60,000 they got
The difference in profit $1,320,000 - $935,000 or about $385,000

Net they make almost $450,000

I thought some would like to know why some of these trades are made and the rationale behind them. My apologies if it is confusing! Feel free to chime in if I made a mistake or to add comments.


Posted via CB10

Kadakn01 I really appreciate your posts. In summary, someone made a moderately sized bullish strangle based on the next earnings call, correct?


I'm looking at similar strategies...wish I didn't have a full time six figure job, my own company and a three year old to distract my focus, lol. Can't follow all the premiums on all the strikes and dates to optimize...Q.. do you follow the cdn options at all? Thinking about sitting on the spread to skim as an additional level...ah, the fun of it all.


Posted via CB10

[OlympusMons]

Not sure if anyone has read this article:

Blackberry BBM Beats Facebook Messenger And WhatsApp To The Apple Watch

Blackberry BBM Beats Facebook Messenger And WhatsApp To The Apple Watch

[DaSchwantz]

Conf call notes with IR at BBRY (more to come over several days as there are many pages of notes to go thru!)

Info on Priv release dates - still targeting November or December, probably November as they want some of this revenue to show in the quarter. It will probably be the last effort BBRY makes on hardware, and chen will decide based on its success whether to invest elsewhere or continue with it. Breakeven on Android Priv is 5M devices (they are already at almost 4 -5M a year on BB10), half the breakeven of BB10 devices obviously due to lower OPEX, not sure if GrSecurity is being used. He said think of the Priv as a call option on the company.

Software breakdown - they don't is the simple answer however in response to concerns that there is no "organic" growth, ie. from software, ex Adhoc and GOOD, it will be in teens, so their is real growth in the underlying Software. Chen believes even if there is no longer value (as he said at the end of the call about EMM given away for free eventually) in BES to manage say email for a phone, they will use BES for many other uses like OTA for cars.
SAF revenue is all BIS, and as mentioned on the call will be replaced by Software revenue in the 4th qtr of 2016 (Dec 2015 - Feb 2016), to be fair the SAF revenue is so low at this point, it is not hard to replace it with SW!
12 to 13 year shelf life on patents, and they include international patent applications to get to the 44,000 that Chen always mentions

IPO of QNX or BBM would not work as both are integral part of IOT initiative, and don't have enough stand alone value to justify an IPO.
425M purchase price was EV, meaning it took into consideration the cash and debt that GOOD had and will take some time to fully integrate.
The reason the cash is not being used to do a larger share buyback nor any large type acquisitions (other than small add on's of say less than 50M) is that they have enough on their plate to integrate GOOD and Adhoc, and taking anything else on would severely limit their resources.
With respect to the shares, they will decide the best use of the timing, and as they authorized an additional 15M shares, (12M originally with 6M already purchased at average of $7.83 and 6M remaining) so a total of 27M or 21M left to purchase. They can start purchases as of this past tuesday, but again may use cash for other purposes if they think they can get a higher return, so no guarantee on how much or when.

An interesting note on the Cisco IP deal.
They were working on it for some time (over a year) and wanted Cisco to pay them a ongoing royalty payment (analysts prefer those for their modelling of revenues vs, the lumpy one time deals) , but cisco wanted to only do a upfront one time deal. Also, the deal gave BBRY access to ALL of Cisco's patents and cisco still paid them 70M, showing the value of BBRY patent portfolio as well as a broad, diverse use of their patents, not just for mobility like most assume. However, the reason Cisco was mentioned, is because it sends a message to other companies in a similar space (he gave an example of a company) that would see that deal and be compelled to do a similar deal with BBRY or potentially face action from BBRY. This is an indirect way of getting the message across without being a patent troll as chen says, and perhaps expect (my opinion) similar rationale for companies that may be mentioned next quarter. Other deals are coming and they have a specific IP person who was brought on to go after these deals (he was the one who got the Cisco and the other unnamed company)
They think their is much more value in the IP than they current book value states, and the analyst community is dramatically undervaluing the portfolio.

He made some personnel changes recently that were difficult, but an example that Chen will do everything to make BBRY successful. He does not talk to analysts as he is simply too busy (which the analysts don't like btw as they all ask to talk to him), he said he sleeps about 3 hours a night! He is not happy (used other language!) with the share price and takes it personally. This was emphasized several times!

The analyst community is too fixated on hardware and not giving credit for the software and also are pessimistic on BBRY's ability to grow organically. The last conf call where Chen fumbled on SW revenue did not help, and the shift to including IP revenue was seen by many to try to divert the lack of growth in BES. Bottom line it is a show me story!


More to come soon!

Re BES growth in the teens, note that's yoy but Wall Street wants a qoq 'showmethemoney' moment. This is also in the middle of a price war environment...clear MOBL from the space and start getting 'comfortably collusive' with the others. The spreads can widen quickly once the new reality is solidified.

Posted via CB10

[3MIKE]

Interesting Short Call Calendar Diagonal Spread Today in BBRY.
Someone bought 4400 Jan 2016 with a strike of $7 for about $162,000 or about $.37 each
The sold June 2016 with a strike of $6 for about $220,000
To explain in simple terms:

They essentially got about $60,000 by doing these 2 transactions (220K - 160K)

They have the right to buy 440,000 shares at $7 by Jan 2016
To pay for that right, they spent $160,000

They also sold the right to sell 220,000 shares of stock for $6 expiring in June 2016 . This means that someone who bought those calls can buy it from them at $6.
Since they sold this right, someone paid them $220,000

So why do it?
The investor hopes to make money from a sharp move in the price before Jan 2016 or a sharp move downward in implied volatility if the stock is essentially flat.
Their is risk here though this becomes a naked call after Jan 2016 assuming the stock has no move above $7 , and they will have to buy back the Jun 2016 call, whether they lose or not depends on what that call is now worth minus what they got ($60,000)

If the stock has a major move, say to $10 by Jan 2016.
They made money on the Jan 2016 (440,000 x $3 = $1,320,000)
The June 2016 probably can be closed out for say $4.25 (add the $6 strike minus the $10 and add as their is some time premium) so they spend $935,000

What they end up making in this scenario (purely hypothetical of course!) is about
The initial $60,000 they got
The difference in profit $1,320,000 - $935,000 or about $385,000

Net they make almost $450,000

I thought some would like to know why some of these trades are made and the rationale behind them. My apologies if it is confusing! Feel free to chime in if I made a mistake or to add comments.


Posted via CB10

This is Chinese to me, I badly need a crash course on this !

[Supa_Fly1]

Lovely, yes. But frankly, all these posters/graphics seem so unprofessional to me. I know BlackBerry was very poor at advertising but this is a new low to me. BlackBerry.com/Priv site looks so amaeturish.

Well the site is be direct, simple, and as not to destroy your productivity so all amenities of modern HTML websites has been removed just like our BB10 devices, as admited by Chen about the consumer wants the apps, and couldn't do that with BB10.

[BanffMoose]

OT: Yeah! Newest OS from T-Mobile (OS 10.3.2.2789/SR2514) fixed some of the screen refresh issues in the Stocks app!

Posted via CB10

[peteberry12]

Re BES growth in the teens, note that's yoy but Wall Street wants a qoq 'showmethemoney' moment. This is also in the middle of a price war environment...clear MOBL from the space and start getting 'comfortably collusive' with the others. The spreads can widen quickly once the new reality is solidified.

Re: growth - This is an important point to be sure. One thing that seemed notable to me from the recent Q2 earnings call was Chen's emphasis on moving software licenses from perpetual to subscription-based.

This is from seekingalpha conference call transcript (as mentioned I can't link w/o 10 posts):

Chen: "Excluding IP licensing, our overall software business continues to expand, up 19% year over year and 9% quarter over quarter. Software license revenue grew 33% year over year, and 14% quarter over quarter...(later on) If you recall, in my opening remarks, I alluded to the fact that software license revenue is growing faster than the overall software. This is a function of our T support business. A portion of the T support is declining due to the legacy BBOS user base, but more importantly, we have a shift from perceptual to subscription is -- and also provided a negative drag to that because the subscription - in subscription-based the maintenance is now, actually -- in the subscription revenue. Sorry."

I'm not entirely clear on how this worked out. I'm assuming that perpetual licenses generally exclude tech support, whereas subscription-based licenses include tech support - please correct me if I'm off here. So at this point, I'm trying to figure out what to make of this. Does this mean that although core software growth (excluding IP, etc.) QoQ isn't spectacular, that the revenues are more sustainable moving forward?

With respect to MOBL - some interesting points by folks here. Although it appears that there are no plans for significant M&A in the foreseeable future, it does seem quite valid that at these prices it would be a reasonable strategy to acquire them - even to prevent competitors from doing so, which _dimi_ mentioned. I mean if it continues to decline, maybe they will reconsider, or maybe it'll get to the point of being able to buy them without dipping beyond 2.5B assuming some cash generation?

[Supa_Fly1]

�And then you�re going to almost have applications that sit in that store which although they�re linked directly through to Google Play, [you�ll have] the peace of mind and knowledge that they�ve gone through a thorough testing process. And any applications that would sit in that store are ones which are highly secure, unlikely to be leaking any of your data.�

Posted via CB10

This isn't to post a jab to the Blackphone 2 ... but also to BlackBerry in their direction regarding secure apps and access to the Google Play Store and Services.

Q: Just how often are certain - secure/approved apps in the Play Store have been tested through their processes and is each version released & published tested and how do they tell a new version of the same APP vX.Y.Z (posted exactly the same) has NOT been circumvented a previous check??!!!!!!!!!!!

[Munx]

Xiaomi CEO on the Chinese phone market:

http://www.wsj.com/articles/BL-CJB-27821

Posted via CB10

[kadakn01]

Kadakn01 I really appreciate your posts. In summary, someone made a moderately sized bullish strangle based on the next earnings call, correct?
...Q.. do you follow the cdn options at all?

Posted via CB10

Thanks for the kind comments, i am trying to contribute as I read these boards daily for great info from everyone including you!

Essentially I think it is correct although one can't say for sure, and I do not follow the cdn options on bbry as most of the open interest is on the US mkts

Posted via CB10

[JaysFan929315]

Rather excited about the Priv, despite the absolutely awful name. There is absolutely no reason this phone should not sell well, but, yes, BlackBerry will have to put some real marketing power behind it!

Posted via CB10

[Superfly_FR]

Confirmations :
BES12 adopted by Peugeot Citro�n (2nd European car maker) and Airbus group. Some traction on European market is always a good sign !

Posted via CB10

[theRock1975]

Here's the Airbus Press Release from Blackberry.

http://press.blackberry.com/press/20...-multi-os.html

Posted via CB10

[Superfly_FR]

Android Secured: Self-Destructing Smartphones, Tap-Proof Messaging | Inside BlackBerry for Business Blog

Google’s soon-to-be-released Android Marshmallow mobile operating system will support a new runtime permissions function and a fingerprint scanner technology that should be of at least some comfort for IT security teams.

Oh no ... not that again ...

edit, to avoir further OT, in a simple sentence : "stolen once, stolen for life". This can't be 2015 security.

[3MIKE]

Another rough day in line for the markets. GEEZ ! When will it stop ?

[CDM76]

Rather excited about the Priv, despite the absolutely awful name. There is absolutely no reason this phone should not sell well, but, yes, BlackBerry will have to put some real marketing power behind it!

Posted via CB10

And that is EXACTLY the reason it may fail...... lack of marketing.

The horribly named Priv is a niche device (not a lot of people want sliders) at best and yet BlackBerry is saying this is its last attempt. The final hail Mary device really should be an android full touch. But hey, what do I know ? LOL

Posted via CB10

[snaponsly]

And that is EXACTLY the reason it may fail...... lack of marketing.

The horribly named Priv is a niche device (not a lot of people want sliders) at best and yet BlackBerry is saying this is its last attempt. The final hail Mary device really should be an android full touch. But hey, what do I know ? LOL

Posted via CB10

I could see it doing well just from the fact that it's different from any other slab phone out there... generally we hear that people don't want keyboards but many don't want it in the form factor of the classic/passport... this one being an android and sporting a full size screen and being thin will right away stand out as being the cool kid on the block... I can already see my people in my surroundings saying "what phone is that!??" in a very curious/interested tone...An all touch device only would just blend in with all the others right now and BB would be ridiculed for that desperate attempt to sell phones. The slider as it looks now will be the differentiator! Hope it lives up to the hype!

[Corbu]

Confirmations :
BES12 adopted by Peugeot Citro�n (2nd European car maker) and Airbus group. Some traction on European market is always a good sign!

Yes. Two PRs released yesterday (here is the Peugeot one: BES12 CHOSEN BY PSA PEUGEOT CITROEN FOR CROSS-PLATFORM ENTERPRISE MOBILITY MANAGEMENT - Press Releases). However, those "wins" were mentioned in the EC.

We booked a total of 2,400 software transactions in Q2. The notable customers include Airbus, Edinburgh Banks, TD bank, Peugeot, Herbalife, Nippon Express, Siemens, Viseon and LG electronics.

I wonder why they came out with those specific PRs in this instance and ask myself if they should not go back to the habit that was once their's (correct me if I am wrong) of announcing major signings throughout the quarter. Seems to me we get very little news of that nature between ECs nowadays and I am not sure this is the best way to proceed. I say, announce the major account signings as they occur (ideally, one per week), create some buzz around the brand (Marketing 101, is it not?)! Don't simply summarize three months' worth of hard work in two lines during the EC. Unless, of course, there are contractual and confidentiality reasons. Am I mistaken?

[peteberry12]

I wonder why they came out with those specific PRs in this instance and ask myself if they should not go back to the habit that was once their's (correct me if I am wrong) of announcing major signings throughout the quarter. Seems to me we get very little news of that nature between ECs nowadays and I am not sure this is the best way to proceed. I say, announce the major account signings as they occur (ideally, one per week), create some buzz around the brand (Marketing 101, is it not?)! Don't simply summarize three months' worth of hard work in two lines during the EC. Unless, of course, there are contractual and confidentiality reasons. Am I mistaken?

I think that significant wins (ie. large companies, or companies with name recognition) should be announced via PR, to the extent that is possible, as you mentioned. I would also announce projects that have some relatively near-term revenue potential and their progress (ex. QNX/BES OTA updates, since that has been mentioned), even in general terms, to at least portray that there are multiple things on the go.

I would, however, avoid less significant wins and news because I find that at times that portrays a certain level of desperation. And I know that some will disagree here, but the blog posts about some type of professional using the classic and constant references to 'tools not toys' is just sort of a waste of time at this point, but I digress.

Here's to staying above 6 today and at least finishing in the green (my TA analysis).

[plasmid_boy]

Yes. Two PRs released yesterday (here is the Peugeot one: BES12 CHOSEN BY PSA PEUGEOT CITROEN FOR CROSS-PLATFORM ENTERPRISE MOBILITY MANAGEMENT - Press Releases). However, those "wins" were mentioned in the EC.



I wonder why they came out with those specific PRs in this instance and ask myself if they should not go back to the habit that was once their's (correct me if I am wrong) of announcing major signings throughout the quarter. Seems to me we get very little news of that nature between ECs nowadays and I am not sure this is the best way to proceed. I say, announce the major account signings as they occur (ideally, one per week), create some buzz around the brand (Marketing 101, is it not?)! Don't simply summarize three months' worth of hard work in two lines during the EC. Unless, of course, there are contractual and confidentiality reasons. Am I mistaken?

I agree. But they are trying to buy back some stocks.

[chrysaurora]

OT:

Hey there,

Sean Henry (I forgot your CB username), can you PM me?

Cheers
Chrys

[Superfly_FR]

[BES] perpetual licenses

When they launched BB12, the rule was "no more prepetual licences".
To only ones who could claim for one were users upgrading existing ones (from BES5,6) with the EZpass program. Lately, I learned from BlackBerry, somewhere in Europe (*cough*cough*) that they were releasing some perpetuals, on a non advertised base for very strategic and large sutomers "because that's what they mandatory want". So, this might be the bell for these exceptions, but in fact, back to the original rule; "pay as you use it".

In other words : EZpass is over, so is the perpetual thing.

Edit : and I confirm subscription is now equivalent to support (Silver, Gold)

[OlympusMons]

OT:

HALO, TGTX and most of the small/mid pharma's getting a nice pop today. Smells like funds adding and getting back into the fray. Hope you managed to swipe enough cheap shares this week M8 and anyone else divested in IBB

BB looks like it's still caught in the tide of the broad market...not much news to counter anything right now.

[morganplus8]

Another rough day in line for the markets. GEEZ ! When will it stop ?

I got a chuckle out of your message, I hadn't looked at the market at all this morning but read your message and thought the same thing. Then I looked at my portfolio and everyone but one was up! Too funny, all this doom and gloom and I'm making money. So many plays are just worn out on the downside. The market doesn't want to see interest rates go up but in order to achieve that, we need weak data, you can't have it both ways! GL

[morganplus8]

OT:

HALO, TGTX and most of the small/mid pharma's getting a nice pop today. Smells like funds adding and getting back into the fray. Hope you managed to swipe enough cheap shares this week M8 and anyone else divested in IBB

BB looks like it's still caught in the tide of the broad market...not much news to counter anything right now.

I stayed home for most of this week to buy stock. I picked up Encana (ECA) close to $ 6.00/shr and was I surprised to see it holding up so well. I firmly believe that energy could lead the next rally. Then there was HALO, it traded below $ 13.00/shr and that is stupid cheap. Now the IBB Index is popping again and it will move to new highs in the weeks ahead. Even Clinton can't keep excellent companies down forever. BlackBerry below $ 6.00 is stupid so I bought there too, and today, if it even tries to drop below $ 6.00 again ................................

Great buying this week.