[W Hoa]

Humor is in here somewhere....few years back the story was how regular (OS7) BBRY users returned BB10 devices because they couldn't get used to the new OS. Now.....BB10 users who somehow got used to the new OS are now returning the Priv because they can't get used to Android.

[masterful]

Humor is in here somewhere....few years back the story was how regular (OS7) BBRY users returned BB10 devices because they couldn't get used to the new OS. Now.....BB10 users who somehow got used to the new OS are now returning the Priv because they can't get used to Android.

Glad I'm not the only one.

Posted via my BlackBerry PRIV

[Corbu]

Two PR from BlackBerry last Friday and earlier today:

BLACKBERRY PARTNERS WITH M1 SINGAPORE TO OFFER BES12 CLOUD TO BUSINESS CUSTOMERS ON ONE MOBILE BILL -

XL PARTNERS WITH BLACKBERRY TO LAUNCH A NEW SERVICE TO ENABLE MULTIPLE PHONE NUMBERS ON A SINGLE DEVICE -

[_dimi_]

Raymond James note on BlackBerry's financials:

http://pbs.twimg.com/media/CkQ3DGTXAAEMVc5.jpg:large

Posted via CB10

[morganplus8]

Raymond James note on BlackBerry's financials:

http://pbs.twimg.com/media/CkQ3DGTXAAEMVc5.jpg:large

Posted via CB10

That's $ .68/shr in EPS based upon savings and current share count. They would recieve tax benefits from that and all they have to do is pay off the debt for $ 75 MM more bucks equaling $ .82/shr for EPS and a stock price well above $ 12.00/shr if not much higher. But I want them to keep making phones! Darn it.

[masterful]

Raymond James note on BlackBerry's financials:

http://pbs.twimg.com/media/CkQ3DGTXAAEMVc5.jpg:large

Posted via CB10

Highlight of it please. Hate click bait and catchy analyst

Posted via my BlackBerry PRIV

[W Hoa]

That's $ .68/shr in EPS based upon savings and current share count. They would recieve tax benefits from that and all they have to do is pay off the debt for $ 75 MM more bucks equaling $ .82/shr for EPS and a stock price well above $ 12.00/shr if not much higher. But I want them to keep making phones! Darn it.

$ .68/shr in EPS with a multiple of 10-12? I can see why some investors want the phones gone. I'm not one of them, however rewarding it might be to support this view in the short term.

[_dimi_]

Highlight of it please. Hate click bait and catchy analyst

Posted via my BlackBerry PRIV

It's just a picture of a paragraph from the report - found on Amber's twitter account.. :-)

Posted via CB10

[_dimi_]

That's $ .68/shr in EPS based upon savings and current share count. They would recieve tax benefits from that and all they have to do is pay off the debt for $ 75 MM more bucks equaling $ .82/shr for EPS and a stock price well above $ 12.00/shr if not much higher. But I want them to keep making phones! Darn it.

Hi Morgan! Nice to see you participating in quiet times :-) Just a quick follow-up on the above: the EBITDA figure is based on software revenue only? So wouldn't we have to multiply 685 million USD (software revenue goal) by 22% is 150 million USD or .25-.30 EPS? Not taking their potential debt deal into account.

Posted via CB10

[Corbu]

Highlight of it please. Hate click bait and catchy analyst

There you go:

[farmwersteve]

Two PR from BlackBerry last Friday and earlier today:

BLACKBERRY PARTNERS WITH M1 SINGAPORE TO OFFER BES12 CLOUD TO BUSINESS CUSTOMERS ON ONE MOBILE BILL -

XL PARTNERS WITH BLACKBERRY TO LAUNCH A NEW SERVICE TO ENABLE MULTIPLE PHONE NUMBERS ON A SINGLE DEVICE -

For the XL patnership, is that a software only play? Or does it have to be on a BlackBerry?

The impression I get is its cross platform, which would be a better software revenue source than if device only.

Posted via CB10

[app_Developer]

$ .68/shr in EPS with a multiple of 10-12? I can see why some investors want the phones gone. I'm not one of them, however rewarding it might be to support this view in the short term.

I think those investors (and I am one of them) will get louder if phone sales are even worse in this next report. The area under the remaining SAF curve is still a lot of money. I'd rather see that money focused on building the future rather than using it to subsidize the past.

Plus all the negative news with every new failed phone launch further deteriorates the brand. How many phones have failed now in a row?

Meanwhile, the rest of the business is healthy and is starting to shape up as a solid growth story. Why not give that business a chance to really thrive?

[BanffMoose]

XL PARTNERS WITH BLACKBERRY TO LAUNCH A NEW SERVICE TO ENABLE MULTIPLE PHONE NUMBERS ON A SINGLE DEVICE -

YES! New service fees! Hopefully this will be the first with more to follow soon. Plus, service will be limited to only three numbers. I thought they were testing with up to nine numbers so the service can grow if it catches on.


Posted via CB10

[BanffMoose]

For the XL patnership, is that a software only play? Or does it have to be on a BlackBerry?

The impression I get is its cross platform, which would be a better software revenue source than if device only.

Posted via CB10

I thought BlackBerry was offering this as a Software as a Service to the carriers. BlackBerry was offering it free to carriers for a share of the profits/income. It was supposed to be device agnostic. And IIRC, they were testing it with up to nine virtual numbers per phone and the limitation of nine was an arbitrary limitation.




Posted via CB10

[world traveler and former ceo]

$ .68/shr in EPS with a multiple of 10-12? I can see why some investors want the phones gone. I'm not one of them, however rewarding it might be to support this view in the short term.

Yes.. sadly, Hardware has been in consistent freefall...PRIV has not changed things. Will a New sales strategy/ new phones? ...

I think Chen is just buying time with Hardware while they focus on ramping up software and services as much as they can, as quickly as they can.




Posted via CB10

[morganplus8]

Hi Morgan! Nice to see you participating in quiet times :-) Just a quick follow-up on the above: the EBITDA figure is based on software revenue only? So wouldn't we have to multiply 685 million USD (software revenue goal) by 22% is 150 million USD or .25-.30 EPS? Not taking their potential debt deal into account.

Posted via CB10

Hi _dimi_!

It's fun with numbers time at Raymond James! You are being asked to accept that their 22% Net for F2020 (that's 2021 for the calendar year folks) is gospel/realistic, implying that BlackBerry will be the only pure play software company on the planet that turns a measly 22% net on a 77% Gross Margin/ $ 685 MM in 2020! (In four years that revenue number could double of course, but who cares) That's what they want you to model. Obviously, everyone will now take projected F2017 revenues and apply their dumb margin to it, a margin that is the worst on this planet for a company in pure software with sector leading superior sequential growth of 30% and a leader in their field. If we apply the same logic to Apple, their stock would trade for $ 10.00/shr. Those numbers aren't worth us looking at and here's why:

John Chen is chasing down costs for hardware at an amazing rate this is why he believes he can breakeven on HW in F2017. How is he doing it? He recorded a $ 192 MM GAAP charge in the last quarter bringing us to within $ .03/shr of breakeven in the last report. He did this knowing PRIV sales weren't strong, so he is in fact watching unit HW sales daily. I think he will have no problem making HW pay its way soon, of course, not many want to hear this but ........

RJ thinks that:
HW write-down cost is $ 175 MM to the bottom line, they used this number knowing he trimmed $ 192 MM out of the last quarter. The prior quarter, HW cost us $ 350 MM in adjusted costs to the bottom line and Chen is working to right-side that loss for 2017. They simply assign $ 175 MM to provide $ 175 MM in savings going forward, how convenient. Chen has also managed inventory extremely well, in real-time (as he sees it developing) dropping it by $ 100 MM in the last Q too, so he is making it happen and everyone is ignoring that fact.

RJ thinks software growth of 30% for F2017 yields only 14% net in F2019 and 22% in 2020!!! What? The poorest numbers for a software company with organic growth and a leader in its sector? What do they think we are doing with 77% Gross margins today in F2017 if we suck at it in F2019? They are treating software as if it was HW! I know they don't like BlackBerry but come on. Software normally yields 80% GM and 44% net for most companies today, that's why they do it, for the high margins. If you apply normal margins to our projected $ 685 MM for F2017, you see a different picture don't you?

For some reason, they want to skip F2017, F2018 and go to 2019 at 14% net and give us ugly returns on software, I don't buy it. Even very conservative sector numbers are double their data set in F2017. Let's leave out tax gains and the actual savings from retiring bonds, those are bonuses on top of the pure software play here. RJ provided BB with a 3-year profitable outlook just to keep the theme of dumping HW alive in their lack of analysis. Everyone else sees a much higher gain toward profitability in the current Fiscal year just by dumping hardware. Chen thinks a breakeven proposition makes more sense as they are close that level today and just need HW to level out so they can pin the costs to unit sales.

Enough!

[masterful]

Thanks Morgan8!

Posted via my BlackBerry PRIV

[Corbu]

morganplus8, rarsen, masterful and 4 others like this.

[rarsen]

Related information from the bigger picture:

Internet of Things to overtake mobile phones by 2018: Ericsson Mobility Report - NASDAQ.com
" - 16 billion connected devices forecast to join the Internet of Things by the end of 2021. Between 2015 and 2021, the number of IoT connected devices is expected to grow 23 percent annually, of which cellular IoT is forecast to have the highest growth rate.
- Smartphone subscriptions to surpass those for basic phones in Q3 this year. By 2021, smartphone subscriptions will almost double from 3.4 billion to 6.3 billion.
- Teenage use of cellular data for smartphone video grew 127 percent in just 15 months. The Traffic Exploration Tool, which accompanies the report, can be used to create customized graphs and tables. The information can be filtered by region, subscription, technology, traffic and device type."

[_dimi_]

Thanks Morgan.

While searching the internet for EBITDA averages, I found a company called Check Point Software Technologies, specialized in cyber security and based in Tel Aviv (ticker: CHKP, valued at 14 billion USD). Perhaps it's just a few years ahead of BlackBerry. Check their balance sheet, income statement, EBITDA.. not bad for a company that most have never heard of before.

Posted via CB10

[morganplus8]

Thanks Morgan.

While searching the internet for EBITDA averages, I found a company called Check Point Software Technologies, specialized in cyber security and based in Tel Aviv (ticker: CHKP, valued at 14 billion USD). Perhaps it's just a few years ahead of BlackBerry. Check their balance sheet, income statement, EBITDA.. not bad for a company that most have never heard of before.

Posted via CB10

Well thank you for pointing that out! If you look at CHPT, they have a current P/E of 22 x earnings, an EBITDA for the most recent quarter of 50% of gross revenues, a net of cash market valuation of $ 10.3 B and a share float of 170 MM shares. In order for BBRY to trade at the same valuation, it would have to show my numbers for EBITDA which would place them in the $ .67/shr area and close to $ .80 minus debt or $ 17.50/shr today. When you back out cash, BBRY would trade for only $ 1.1 B today and need to carry close to $ 20.00 plus dollars per share to equal the same market cap as CHPT. BBRY could retire all the debt, trade at a P/E of 22 or $ 17.50/shr minus HW and even higher based on the dollar for dollar cash equivalent of CHPT.

It shows you two things, Raymond James thinks BB will fail on software versus everyone else and not grow the business in any way going forward. BBRY is dirt cheap at these levels and the sum of the parts should reflect the true potential of software with or without HW in the same sentence. Thanks

BBRY:
The stock is doing well today, we are spending the whole day above its 200-dma for the first time in awhile now and we can move as high as the RSI over-bought levels (70 plus) will allow us heading into earnings. Looking good here.

[spiller]

I think those investors (and I am one of them) will get louder if phone sales are even worse in this next report. The area under the remaining SAF curve is still a lot of money. I'd rather see that money focused on building the future rather than using it to subsidize the past.

Plus all the negative news with every new failed phone launch further deteriorates the brand. How many phones have failed now in a row?

Meanwhile, the rest of the business is healthy and is starting to shape up as a solid growth story. Why not give that business a chance to really thrive?

I think Blackberry is just about to go direct sales only with two androids and one bb10. Full control over the updates. But this might mean no VOIP on some carriers?

And I bet they will launch Blackberry Experience via Google Play Store very soon.

After the Priv I don't think carriers will stock. My corporate wireless rep said he is having a lot of issues with the Priv and was steering people away from it -- to the S7 since it's the same price on contract.

When is the full touch coming out?

[kadakn01]

Another option trade this one for 12K calls (open interest is currently at 4,638 so this is 3X the current number of contacts "open" ) at .31 for Aug 2016 at $8 strike (at the ask) or $372,000 and coded a "BWRT" simply meaning it is 1 leg of a order involving either a sale or buy or stock at the same time. So if we look at the trades, we find a 420,000 share block (coded as a "Qualified Contingent Trade" or essentially contingent on the option order above executing at $7.40 (done at $.06 below the bid or $.07 below the last trade at $7.47 when it went thru) for 3.1M
Both trades were done at 1:31pm EST

This "appears" to be a sale of stock and a purchase of 3X the number of calls at a slightly higher price. This one could be a trader taking some money off the table by pocketing the difference of the $3.1M minus the cost of the calls of about $372K or $2.7M
It could be part of some other strategy as well such as a short sale and buy of calls to hedge, we can't say with 100% certainty. There was a smaller one yesterday as well. in any case the option market has been heating up with mostly bullish type trades in the past several weeks, no guarantee they are right, but good to note.

In some cases with a BWRT trade it has been a buy write or purchase of stock and simultaneously selling call options to get some income, this is normally where I have seen them done.
----------------------------------------------------------------------------------------------------------------------------------------------__________________________________________________ ______________________
WARNING the following is for (M8 mainly) option experts only!!!!!!!!!!!!

My reason for suspecting this is in fact NOT a short sale and buy of options to hedge is the following. If you take the Delta on the calls which are .35 and multiply by 3 you get 1.05
The sale of stock is a 1 delta.
So what I suspect is a Stock replacement , buying calls to open at total of 1.05 Delta and selling existing stock to close at 1 Delta. I doubt it would be a synthetic long put because the deltas cancel. One would be long and short at almost the same delta.

End of warning, back to scheduled programing!!!!!!!!!!!

Posted on my Priv

[Corbu]

https://www.blackberrycentral.com/ne...-rome-hamburg/
Why BlackBerry Needs Rome & Hamburg

Another point of view.

[morganplus8]

Another option trade this one for 12K calls (open interest is currently at 4,638 so this is 3X the current number of contacts "open" ) at .31 for Aug 2016 at $8 strike (at the ask) or $372,000 and coded a "BWRT" simply meaning it is 1 leg of a order involving either a sale or buy or stock at the same time. So if we look at the trades, we find a 420,000 share block (coded as a "Qualified Contingent Trade" or essentially contingent on the option order above executing at $7.40 (done at $.06 below the bid or $.07 below the last trade at $7.47 when it went thru) for 3.1M
Both trades were done at 1:31pm EST

This "appears" to be a sale of stock and a purchase of 3X the number of calls at a slightly higher price. This one could be a trader taking some money off the table by pocketing the difference of the $3.1M minus the cost of the calls of about $372K or $2.7M
It could be part of some other strategy as well such as a short sale and buy of calls to hedge, we can't say with 100% certainty. There was a smaller one yesterday as well. in any case the option market has been heating up with mostly bullish type trades in the past several weeks, no guarantee they are right, but good to note.

In some cases with a BWRT trade it has been a buy write or purchase of stock and simultaneously selling call options to get some income, this is normally where I have seen them done.
----------------------------------------------------------------------------------------------------------------------------------------------__________________________________________________ ______________________
WARNING the following is for (M8 mainly) option experts only!!!!!!!!!!!!

My reason for suspecting this is in fact NOT a short sale and buy of options to hedge is the following. If you take the Delta on the calls which are .35 and multiply by 3 you get 1.05
The sale of stock is a 1 delta.
So what I suspect is a Stock replacement , buying calls to open at total of 1.05 Delta and selling existing stock to close at 1 Delta. I doubt it would be a synthetic long put because the deltas cancel. One would be long and short at almost the same delta.

End of warning, back to scheduled programing!!!!!!!!!!!

Posted on my Priv

Now we are in complete agreement as I didn't see this trade as a short/hedge trade, (when I first read your analysis). I'm guessing they sold the stock for a large enough profit ($ .70 - $ .80/shr profit) to merit owning levered calls going forward, as we all know, BBRY will not be closing unchanged at the next Q! Thanks for your efforts as always.