[bbjdog]

OT: SPHS

Overweight wow?

Posted via my BlackBerry PRIV

That says it all, double from current price.

[morganplus8]

On the topic of TD ratings, I saw this: BlackBerry?s (BB) ?Buy? Rating Reaffirmed at TD Securities - BBNS

Basically it says TD reaffirms their buy rating, and have a price target of $9 CDN. While I generally don't give analysts a whole lot of mind, and find it almost offensive that their ratings changes can affect stocks to the tune of double digit percentage price changes, I do have to ask here what's going through their head in cases like this. So it's a buy. Good enough. Because you think it's going to $9CDN? But wait, the stock is currently at like 10.40 CDN. So you think the stock is going to decrease by 15%, and that's the sound basis of a good investment. Can anyone explain what's going on here? This is hardly a unique situation for ratings as a whole.

I would make sure it is in fact in CDN dollars, they usually quote US in their research. That would make more sense. As for analysts in general, I wouldn't read much into what they say, as long as they raise their targets the "average target" will go up and that's what counts as far as they are concerned. Let's face it, if the stock hasn't been down to the lowly targets in a year, it isn't looking good for their ability to call the market in that stock. If I get a chance I'll look it up.

Let's get this bond issue closed this Friday and start the fireworks!

UPDATE: Yes, it is in US dollars so it all makes sense. At $ 9.00/US you have a large enough price gain to equate to a "Buy" in the stock.

Here is the report in full:



Good luck everyone.

[Seadog83]

Ah yes, makes more sense. Looks like that one article got it wrong...

[Corbu]

While on the subject of analysts:
BlackBerry (BBRY): Debt Redemption Has Slight Positive EPS Impact - Wells Fargo

Wells Fargo analyst, Maynard Um, maintained his Market Perform rating on shares of BlackBerry (NASDAQ: BBRY) after the company announced that it plans to redeem its entire 6% convertible debt of $1.245B by September 2. BBRY is to redeem the debt at 106.7213%. BBRY announced that it will issue $605MM of unsecured convertible debt at 3.75% due November 13, 2020 by September 2, 2016. The 3.75% debt is identical to the 6% debt except the 3.75% debt is not redeemable prior to its maturity. The new debt can be convertible at $10/share and upon conversion would be 11.57% of common shares.

Relative to the analyst's expectations, BBRY will be redeeming its debt roughly two months earlier (than its call date of November 13, 2016) albeit at a 2.7% higher premium (the analyst had expected a 4% premium). The net result to F17 EPS is an increase of 2c [Street: ($0.17)] as the higher premium and new debt is offset by the earlier redemption.

No change to the valuation range of price target of $7.25 - $8.00.

[morganplus8]

While on the subject of analysts:
BlackBerry (BBRY): Debt Redemption Has Slight Positive EPS Impact - Wells Fargo

I wish analysts would do a minimal amount of research before they draw conclusions about the debt. Here is my old post explaining the terms of the bonds.

"LONG-TERM DEBT

Convertible Debentures

In fiscal 2014, Fairfax Financial Holdings Limited (“Fairfax”) and other institutional investors invested in the Company through a $1.25 billion private placement of the Debentures. Interest on the Debentures is payable quarterly in arrears at a rate of 6% per annum. The Debentures have a term of seven years and each $1,000 of Debentures are convertible at any time into 100 common shares of the Company for a total of 125 million common shares at a price of $10.00 per share for all Debentures, subject to adjustments. The Company has the option to redeem the Debentures after November 13, 2016 at specified redemption prices in specified periods. Covenants associated with the Debentures include limitations on the Company’s total indebtedness.

Under specified events of default, the outstanding principal and any accrued interest on the Debentures become immediately due and payable upon request of holders holding not less than 25% of the principal amount of the Debentures then outstanding. During an event of default the interest rate rises to 10% per annum.

The Debentures are subject to a change of control provision whereby the Company would be required to make an offer to repurchase the Debentures at 115% of par value if a person or group (not affiliated with Fairfax) acquires 35% of the Company’s outstanding common shares, acquires all or substantially all of its assets, or if the Company merges with another entity and the Company’s existing shareholders hold less than 50% of the common shares of the surviving entity. "

At that time I said:
(This is why I'm suggesting that this Fall is going to be an interesting time for BlackBerry stock. If someone takes a run at the company, BB must counter with an offer to retire the bonds at a 15% premium to their face value allowing that company making the takeover offer, a chance to see all of the common stock available for purchase, and thus "potentially"complete a takeover at some price. By retiring the debt, that door opens up so much easier for them to take a run at BB. I'm not saying I want it to be taken over, rather, we would benefit from this debt reduction and avoidance of a possible dilution of common stock as we turn profitable going forward. Hence, a much higher stock valuation).

Today:
The debt starts to be redeemed at a 4% premium and that number goes up as milestone dates and quantity are redeemed. As S.A. states, and others incorrectly, it is not redeemable in full on Nov. 13 2016 at 4%! Further, if someone comes along and buys 35% of the company, the company must pay to bond holders a 15% premium. The main reason the bonds traded at a premium was because BlackBerry was in there daily to the tune of $ 48,000 or 25% of the average daily volume. With those purchases in the open market, brought about by BlackBerry, the bonds traded just below the package redemption price. John Chen has a reason for doing this in such short order and no one has put forth a reasonable explanation as to why he is in a hurry. I think something is up otherwise he would work within the original agreement and retire bonds at the best rate possible.

[DaSchwantz]

OT: SPHS

Overweight wow?

Posted via my BlackBerry PRIV

What would you expect? They're running the issue...

Posted via CB10

[DaSchwantz]

I wish analysts would do a minimal amount of research before they draw conclusions about the debt. Here is my old post explaining the terms of the bonds.

"LONG-TERM DEBT

Convertible Debentures

In fiscal 2014, Fairfax Financial Holdings Limited (�Fairfax�) and other institutional investors invested in the Company through a $1.25 billion private placement of the Debentures. Interest on the Debentures is payable quarterly in arrears at a rate of 6% per annum. The Debentures have a term of seven years and each $1,000 of Debentures are convertible at any time into 100 common shares of the Company for a total of 125 million common shares at a price of $10.00 per share for all Debentures, subject to adjustments. The Company has the option to redeem the Debentures after November 13, 2016 at specified redemption prices in specified periods. Covenants associated with the Debentures include limitations on the Company�s total indebtedness.

Under specified events of default, the outstanding principal and any accrued interest on the Debentures become immediately due and payable upon request of holders holding not less than 25% of the principal amount of the Debentures then outstanding. During an event of default the interest rate rises to 10% per annum.

The Debentures are subject to a change of control provision whereby the Company would be required to make an offer to repurchase the Debentures at 115% of par value if a person or group (not affiliated with Fairfax) acquires 35% of the Company�s outstanding common shares, acquires all or substantially all of its assets, or if the Company merges with another entity and the Company�s existing shareholders hold less than 50% of the common shares of the surviving entity. "

At that time I said:
(This is why I'm suggesting that this Fall is going to be an interesting time for BlackBerry stock. If someone takes a run at the company, BB must counter with an offer to retire the bonds at a 15% premium to their face value allowing that company making the takeover offer, a chance to see all of the common stock available for purchase, and thus "potentially"complete a takeover at some price. By retiring the debt, that door opens up so much easier for them to take a run at BB. I'm not saying I want it to be taken over, rather, we would benefit from this debt reduction and avoidance of a possible dilution of common stock as we turn profitable going forward. Hence, a much higher stock valuation).

Today:
The debt starts to be redeemed at a 4% premium and that number goes up as milestone dates and quantity are redeemed. As S.A. states, and others, it is not redeemable in full on Nov. 13 2016 at 4%! Further, if someone comes along and buys 35% of the company, the company must pay to bond holders a 15% premium. The main reason the bonds traded at a premium was because BlackBerry was in there daily to the tune of $ 48,000 or 25% of the average daily volume. With those purchases in the open market, brought about by BlackBerry, the bonds traded just below the package redemption price. John Chen has a reason for doing this in such short order and no one has put forth a reasonable explanation as to why he is in a hurry. I think something is up otherwise he would work within the original agreement and retire bonds at the best rate possible.

Yes, the premium was due to BBRY purchases in the open market. It was probably tested to see if any current holders were eager to clear, and when that didn't really happen they pulled the trigger on the redemption and new issue. Prem was obviously on board so maybe driven by him.

Posted via CB10

[morganplus8]

Yes, the premium was due to BBRY purchases in the open market. It was probably tested to see if any current holders were eager to clear, and when that didn't really happen they pulled the trigger on the redemption and new issue. Prem was obviously on board so maybe driven by him.

Posted via CB10

I can't remember the start date of the open market purchases (month and a 1/2 ago?) but they have purchased $ 5 million bucks worth of debt hence the $ 1.245 B final float valuation for this Friday. If the daily volume is a small $ 200,000 and they do 25% of that, they would have to have received a block offer from one of the bond holders. As I say, it should be very interesting to see where they go with this as it looks urgent and not in BlackBerry's best interest, pardon the pun.

[davemason2k]

Morgan, what surprises do you see in the BBRY conference call next month? Any educated guesses?

[Corbu]

Will BlackBerry Radar Put BlackBerry Back on the Radar?

[Corbu]

Wells Fargo
Basically what was posted earlier...
BlackBerry Seeks Redemption - Barron's

By Wells Fargo Securities ($7.92, Aug. 29, 2016)

BlackBerry announced that it plans to redeem its entire 6% convertible debt of $1.245 billion by Sept. 2.

BlackBerry (ticker: BBRY ) is to redeem the debt at 106.7213%. BlackBerry announced that it will issue $605 million of unsecured convertible debt at 3.75% due Nov. 13, 2020, by Sept. 2, 2016. The 3.75% debt is identical to the 6% debt except the 3.75% debt is not redeemable prior to its maturity. The new debt can be convertible at $10 a share and upon conversion would be 11.57% of common shares. Relative to our expectations, BlackBerry will be redeeming its debt roughly two months earlier (we expected by its call date of Nov. 13, 2016) albeit at a 2.7% higher premium (we expected a 4% premium).

The net result to our fiscal 2017 earnings-per-share estimate is a narrowing to a loss of eight cents from a loss of 10 cents [Wall Street estimates a loss of 17 cents] as the higher premium and new debt is offset by the earlier redemption. However, we widen our fiscal 2018 EPS estimate to a loss of nine cents from a loss of five cents [the Street estimates a loss of 18 cents] as we had previously assumed a 4% debt redemption premium and excluded any new debt.

Net-net, we believe the debt exchange makes sense as the net result is bottom-line improvement but still retaining financial flexibility at a lower interest rate. We believe BlackBerry’s transformation into an end-point security-solutions company is still ongoing with a de-emphasis on hardware and proof points in software growth still needed and maintain our Market Perform rating.

Our $7.25-$8.00 valuation range is based on a fiscal 2017 sum-of-the-parts multiple of 4.0 times for Software plus net cash.

-- Maynard Um
-- Munjal Shah
-- Jason Ng

[morganplus8]

Morgan, what surprises do you see in the BBRY conference call next month? Any educated guesses?

I think the story will be about Hardware, Chen has publicly stated that he would decide the fate of the HW division in Sept. while looking more like he wants to sell phones for 2 more quarters. I think he is pulling out the stops before that crucial date (Q2). The largest order for the DTEK50 has occurred within the Q2 quarter, as units shipped, he has hammered costs per unit down and now he is racing to get those bonds under his roof before their due date. I believe he is really trying to set us up for good news. It appears that the media doesn't understand how redemption works, they all have it wrong, so I think there is some room for a surprise here. We don't have to wait that long, let's get to Friday, claim the bonds and see how the stock really trades after that.

[_dimi_]

I can't remember the start date of the open market purchases (month and a 1/2 ago?) but they have purchased $ 5 million bucks worth of debt hence the $ 1.245 B final float valuation for this Friday. If the daily volume is a small $ 200,000 and they do 25% of that, they would have to have received a block offer from one of the bond holders. As I say, it should be very interesting to see where they go with this as it looks urgent and not in BlackBerry's best interest, pardon the pun.

http://press.blackberry.com/en/finan...ebentures.html

It was announced on August 4th... or 16 business days between their announcement of the open market purchases and last Friday's news.

Just playing devils advocate here Morgan, but if JC shows good results in September, it would mean they'd get a better rate than the 3,75% currently on the table for the new bonds plus a lower premium had they held off until November before redeeming those bonds? Wouldn't the downside be that if the results truly are good and shares show more improvement, JC could have been in a tough position if bond holders were to (threaten to) convert their shares ahead of the November deadline? In that case, he would have to buy shares in the open market, probably at a higher price than the difference in premium that he's paying to redeem those bonds today? We could argue that no bond holder would be willing to convert their bonds into shares if the price is below 10 USD, but if they like the company, it would sound much better for them to convert rather than buy 10 or 15 million shares in the open market?

What do you think about some bond holders having accepted these terms without being part of this new deal.. and others that will remain part of it? Is there anything interesting to see there? Could JC not have bought back half of those bonds from the 'less interested' bond holders at today's premium and left Fairfax among others with their 'old' bonds? It seems to me that this is what he initially tried? Was the initial 'open market offer' not sweet enough to persuade half of them to sell?

I know, I'm in overdrive.....

Posted via CB10

[Merboy6969]

Just purely speculating or daydreaming...

Apparently google has ended their Nexus line of phones and are announcing this fall a big change in their hardware/software direction.

http://m.androidcentral.com/end-nexu...forge-new-path

Maybe the rush on the debt retirement for BlackBerry is linked to a big partnership??? I do remember J.C. saying a little while back something about new phones and Android N.

Again just a thought.



Posted via CB10

[Corbu]

blackberry The U.S. Army trusts AtHoc, the crisis communications division of BlackBerry, to protect nearly 600,000 personnel worldwide. #AtHoc #TeamBlackBerry

[BanffMoose]

I think the story will be about Hardware, Chen has publicly stated that he would decide the fate of the HW division in Sept.

BlackBerry will probably get hammered no matter what they decide to do with HW. Analysts and tech bloggers have been gunning for BlackBerry for so long they will not say anything positive or even remotely objective.

They will always have a "but..." in their analysis and paint a bleak picture. Doesn�t matter what BlackBerry does.

Posted via CB10

[DaSchwantz]

I think the story will be about Hardware, Chen has publicly stated that he would decide the fate of the HW division in Sept. while looking more like he wants to sell phones for 2 more quarters. I think he is pulling out the stops before that crucial date (Q2). The largest order for the DTEK50 has occurred within the Q2 quarter, as units shipped, he has hammered costs per unit down and now he is racing to get those bonds under his roof before their due date. I believe he is really trying to set us up for good news. It appears that the media doesn't understand how redemption works, they all have it wrong, so I think there is some room for a surprise here. We don't have to wait that long, let's get to Friday, claim the bonds and see how the stock really trades after that.

Well, it is true that the option for anyone to convert above 10 USD was pushed out several years, and that he has some reason to clear the original converts asap rather than wait till November. It's also true that the related costs were effectively moved forward from q4 to q3 and were a little higher than what they would have been if he waited. We also know that Chen indicated that he would redeem all the original converts in November, and that doing so would have left Fairfax with a less than 10% share position. I expected some sort of issuance that would keep Prem in control, and stated so on this board at least twice, I think...so fully expected something else before November, just didn't know it would be in the form of a new convert. As a shareholder, I'm happy to not have any dilution at this critical EPS juncture and that the huge overhang on the SP above 10 USD appears to have been diminished. The timing could have a number of reasons. I'm curious to know who is participating in the new issue for precisely this reason, and this time they're not telling you.

Posted via CB10

[Corbu]

Some info on BBM from The Nigerian Tribune:
http://tribuneonlineng.com/blackberr...erce-together/
BLACKBERRY, EMTEK BRINGING CHAT, SOCIAL, COMMERCE TOGETHER

[theRock1975]

This one is for Rarsen!

It may bring to light why WhatsApp sharing phone numbers with Facebook is such a huge privacy breach.

http://www.zerohedge.com/news/2016-0...e-lot-creepier

Posted via CB10

[masterful]

OT : SPHS

What's going on? There is no support at all?

Posted via my BlackBerry PRIV

[morganplus8]

BlackBerry Announces Normal Course Issuer Bid for Convertible Debentures -

It was announced on August 4th... or 16 business days between their announcement of the open market purchases and last Friday's news.

Just playing devils advocate here Morgan, but if JC shows good results in September, it would mean they'd get a better rate than the 3,75% currently on the table for the new bonds plus a lower premium had they held off until November before redeeming those bonds? Wouldn't the downside be that if the results truly are good and shares show more improvement, JC could have been in a tough position if bond holders were to (threaten to) convert their shares ahead of the November deadline? In that case, he would have to buy shares in the open market, probably at a higher price than the difference in premium that he's paying to redeem those bonds today? We could argue that no bond holder would be willing to convert their bonds into shares if the price is below 10 USD, but if they like the company, it would sound much better for them to convert rather than buy 10 or 15 million shares in the open market?

What do you think about some bond holders having accepted these terms without being part of this new deal.. and others that will remain part of it? Is there anything interesting to see there? Could JC not have bought back half of those bonds from the 'less interested' bond holders at today's premium and left Fairfax among others with their 'old' bonds? It seems to me that this is what he initially tried? Was the initial 'open market offer' not sweet enough to persuade half of them to sell?

I know, I'm in overdrive.....

Posted via CB10

Interesting thoughts. They went fishing for $ 125 MM worth of bonds and got $ 5 MM so they contacted all of the holders and asked them what would it take to retire the debt. Everyone agreed to submit their bonds with $ 605 MM wanting to continue on with a stock option on BlackBerry. Fine, they will retire all of the debt at a hefty penalty. The 3.75% yield is really more like 5.25% after the $ 40.5 MM bond rollover penalty is taken into account. BB saved a very small amount on those newly issued bonds, about .75% versus just letting the old bonds ride. They will save some cash on the retired bonds but not as much as reported due to the penalties involved. I thought they would get closer to the $ 125 MM redemption amount prior to Nov. 13 2016 as that is the cut-off date for that purchase program. BB could only retire a set of available bonds on Nov. 13th, not all of them and they have to pay a higher penalty as time goes on so it is far more complicated than the media suggest.

BB couldn't buy a single bond back without the Exchange granting them their opportunity in early August. They needed approval just to buy what little they did get. They don't need approval to buy back bonds after Nov. 13th but the purchase is subject to a limited amount and at various penalties. They clearly assessed this mess and wanted more, talked directly to the holders and then back to the exchange for approval and launched this latest bid. The one thing I don't know is how they determine who has to forfeit their bonds starting on Nov. 13th but there is clear language that bonds can be recalled at 104% of face value and up from there. I also thought that Chen would get 1/2 the holders to sell back to him at post Nov. 13th, and, thinking he would fill far more than the $ 5 MM he got this month. I don't know why he would take on more debt, makes no sense unless it was the only deal he could make to retire the entire issue.

Bond holders knew he could and would buy bonds at regular intervals starting in Nov. 2016, if the stock was above $ 10.40/shr/US there would have been a purchase for redemption at the agreed upon price with the bond holder juggling to save their premium not BlackBerry. BB just has to pay the correct penalty for the correct amount of bonds at the correct time to get all the bonds legally available to them. I don't know if showing a slight profit in Q2 would move the needle at all in terms of better yields etc., probably not. It doesn't matter if the stock trades at $ 15.00/shr on Nov. 13th, BB would still be able to call the bonds starting at 104% or more as per the contract. And so, you are right, bond holders would be forced to convert their bonds above the penalty rate in order to save the gains the stock has made above the penalty price at any given moment. I can't wait to see how this all plays out as the only benefit so far is the reduction in dilution of the stock but at a hefty price. Then there is that pile of debt to explain ...............

I hoped the bonds would be recalled without new debt forcing many players into the market to buy the common stock to protect their paper losses in this name. It isn't happening for Prem, he gets a free pass not to protect his investment.

[TGIS]

OT : SPHS

What's going on? There is no support at all?

Posted via my BlackBerry PRIV

No support for BBRY either it seems.

[fanBBRY]

Not much volumes for BBRY ... Maybe just weaker and impatient few selling

[morganplus8]

Not much volumes for BBRY ... Maybe just weaker and impatient few selling

It's the end of the month, end of the quarter and end of the Summer, no one is there, or, wants to trade until September rolls around. Wait until next week when everyone gets off their boats and comes into work!

[Corbu]

Coffee shop customers shocked by ?Like? stunt in Cifas Data To Go video - BT

kadakn01, morganplus8, dusdal and 4 others like this.