[Seadog83]

Good old blackberry. Went away mid Oct on vacation, and was hoping a nice month long absence would let BB regroup and I'd be pleasantly surprised when I came back. Not only was that not the case, but also apparently the rest of the market decided to make a mess in the bed as well. Ah well, way she goes.

To that end I was pleasantly surprised about the acquisition and subsequent call this morning. Glanced at the co last week when the rumour came out, but given it being a rumour didn't give it much thought. However, now that it's official the more I read about this company and deal, the more I like it. Seems to be a lock and key fit, from the technologies, focus, and industries they're involved in. Chasing the same end goal, but with different tactics that don't overlap at all. Being private is a bit of a shame since finances are hard to come by, but based on Chens 'less tha 7x revs" I guess hes confident sales will be over $200m and still growing in high double digits. Does anyone know if Cylance is currently profitable? In addition to the top line addition, it would be nice if we can get enough of a bump to the bottom line such that the GAAP/Non-GAAP EPS could both be consistently in the even low (+) to shut the bears up once and for all.

[smithm565]

https://www.channelnomics.com/channe...urity-and-more

Posted via CB10

[Corbu]

Replay of the BB/Cylance Conference Call:
https://event.on24.com/eventRegistra...47&mode=launch

[Corbu]

RBC Capital Markets

RBC Dominion Securities Inc.
Paul Treiber, CFA (Analyst)

November 16, 2018

BlackBerry Limited

$1.4B Cylance acquisition completes BlackBerry

Our view: BlackBerry’s $1.4B acquisition of Cylance accelerates the company’s long-term strategy to become a secure EoT platform. Cylance’s premium valuation (7x sales) points to its strategic value, but requires sustained rapid growth and execution in leveraging long-term opportunities (in enterprise, automotive, and embedded devices) to create long-term shareholder value. Maintain Sector Perform, $11.00 target.

Key points:

• BlackBerry to acquire Cylance for $1.4B. BlackBerry announced this morning that it would acquire next-generation cybersecurity provider Cylance for $1.4B. Management disclosed that the acquisition equates to “less than 7x forward sales” and would be accretive within one year to adj. EPS. BlackBerry is not providing any other additional financial guidance pending the deal close, expected by Q4/FY19 (February 2019).

• Cylance + BlackBerry = Turnkey secure EoT platform. Cylance is a provider of AI/ML-based endpoint protection solutions. Unlike traditional antivirus, next-generation AI/ML-based endpoint protection solutions are “signature-less”, which are well suited for embedded devices like vehicles and IoT sensors. The combination of Cylance’s endpoint protection with BlackBerry’s Spark EoT management and QNX OS creates a turnkey platform for securely managing connected devices. Like BlackBerry is doing with QNX, we believe it’s possible that BlackBerry may try to secure partnerships and embed Cylance’s endpoint protection solutions into chipsets for automotive and other vertical markets.

• Cylance to accelerate BlackBerry’s software growth. BlackBerry intends to run Cylance as a standalone business unit, which suggests that the majority of revenue synergies are long-term in nature and Cylance is seeing healthy standalone growth (Cylance disclosed that its revenue rose 90 % Y/Y in its fiscal year ended April 2018). We are updating our estimates to reflect Cylance. While the acquisition slightly reduces our FY20E adj. EPS estimate from $0.22 to $0.18, we expect BlackBerry’s pro-rated FY20E software revenue growth to rise from 13 % (standalone) to 18 % (pro-rated with Cylance).

• A premium valuation, despite the pullback in cybersecurity valuations. While valuation multiples on next-generation cybersecurity companies have declined by ~30 % over the last 6 months, the acquisition of Cylance at ~7x sales requires robust growth assumptions to deliver attractive IRR to investors. Our sensitivity analysis suggests that Cylance needs to achieve >25 % revenue CAGR over the next 10 years and >30 % EBITDA margins within 5 years to yield a >15 % IRR on the acquisition.

• Maintain Sector Perform, $11.00 target. Our $11.00 target (unchanged) equates to 4.2x CY19E EV/S on BlackBerry’s core software business, plus $1.4B for Cylance and $531MM pro forma net cash. On a sum of the parts basis, we value BlackBerry’s core Enterprise Software at 4.0x CY19E EV/S, BTS at 6.1x, IP/Licensing/Other at 3.0x, and Cylance at 6.9x.

[W Hoa]

Who is this dufus?

Two people were commenting in the article. The dufus is "One partner of Irvine, Calif.-based Cylance who didn't wish to be identified"

The one we should be listening to is the partner that was identified, Michael Crean of Solutions Granted.

Who said:

""Not too often in life can you change the spots on a leopard, but this acquisition is going to give them the opportunity," Crean said.

BlackBerry's advances in the automotive and embedded technology spaces will allow the company to make a big play from a mobile IT perspective, Crean said. Integrating Cylance's artificial intelligence and machine learning capabilities into the connected devices ecosystem that BlackBerry already has to provide greater protection will be a game-changer, according to Crean.

"Sometimes as humans, we fear change," Crean said. "But I don't think someone goes around and throws $1.4 billion at something if they don't believe in it."

[W Hoa]

Looks like Chen held out for a good deal with Cylance.

"This isn’t the first time the two companies have talked. Cylance had recently discussed a much higher offer price with Blackberry, but Blackberry walked away during the due diligence process, according to multiple people familiar with the matter. Cylance has talked to multiple buyers for the past year about an acquisition worth around $2 billion, people familiar with the search said."

https://www.theinformation.com/briefings/cdb169

[FeitaInc]

Replay of the BB/Cylance Conference Call:
https://event.on24.com/eventRegistra...47&mode=launch

may be just me, but I can't seem to get this one to work. something about a registration cookie not being present or something like that.

[Corbu]

may be just me, but I can't seem to get this one to work. something about a registration cookie not being present or something like that.

Hi, Feitalnc.

Could be it works in my case because I had already registered yesterday.

Try going through https://www.blackberry.com/ca/en/company/investors

And "Join Now". See whether that works.

No transcript available (as yet), unfortunately.

[FeitaInc]

Hi, Feitalnc.

Could be it works in my case because I had already registered yesterday.

Try going through https://www.blackberry.com/ca/en/company/investors

And "Join Now". See whether that works.

No transcript available (as yet), unfortunately.

like a charm.
thanks Corbu!

[bbjdog]

It's been a long time waiting for this type of acquisition. Now let's focus on getting the product on my mobile device. My pc has become second to my mobile phone. I will be waiting for it.

Happy weekend to everyone and especially Corbu's girlfriends. Lol

[Corbu]

https://www.cnbc.com/2018/11/17/blac...-security.html
Blackberry's acquisition of Cylance means the smartphone pioneer is serious about becoming a purely cybersecurity company

[Seadog83]

Looks like Chen held out for a good deal with Cylance.

"This isn’t the first time the two companies have talked. Cylance had recently discussed a much higher offer price with Blackberry, but Blackberry walked away during the due diligence process, according to multiple people familiar with the matter. Cylance has talked to multiple buyers for the past year about an acquisition worth around $2 billion, people familiar with the search said."

https://www.theinformation.com/briefings/cdb169

As I said, the more I find out, the happier I am with this deal. In addition to this, I've read murmurings on either Seeking Alpha or ST about Cylance investors who are not happy about the price of the deal. While it's true they may have been able to sell or IPO for more, the true contribution to Cylance wasn't just $1.4b, but also access to wildly complimentary technology, contacts, partners, patents, and engineers. The latter costs BB nothing, yet has immense potential to advance Cylance's business. The fact that their CEO was pragmatic enough to think about the long game vs short term dollars and cents is a huge checkmark in my books. As I'm sure everyone would agree, that despite how frustrating our current stale stock price is, Chen is doing the same thing. "Money today be damned. Check back in a few years to see how these decisions panned out"

[Corbu]

BlackBerry (NYSE:BB)‘s stock had its “hold” rating reaffirmed by research analysts at Canaccord Genuity in a research report issued on Friday.

The analysts wrote, “We believe this transaction accelerates BlackBerry’s strategy of leading secure endpoint enterprise-of-things (“EoT”) communications, benefits multiple areas of the business across UEM, QNX and Spark, and drives potential synergies given the complementary customer bases. With the IoT market’s heightened growth expectations of both security and AI, as well as investor anticipation for BlackBerry’s cash deployment, we believe the transaction will be well received by the market. However, given post-merger platform integration that needs completion before synergies are realized and the premium deal multiple, we maintain our HOLD rating and $11 price target and await more color on pro forma financial impact from management post closing the acquisition.””

[W Hoa]

CIBC World Markets analyst Todd Coupland upgraded BlackBerry Ltd. (BB-T, BB-N) to “outperformer” from “neutral.”

[Corbu]

Bank of America/Merrill Lynch
Daniel Bartus

BlackBerry

Cylance acquisition helps make the endpoint strategy more realistic

Maintain Rating: UNDERPERFORM | PO: 9.00 USD | Price: 8.97 USD Equity | 19 November 2018

Blackberry announces acquisition of Cylance for $1.4bn

Blackberry announced its intent to acquire private endpoint security vendor Cylance for roughly $1.4bn. Cylance is a high-growth player in the Endpoint Protection Platform (EPP) market, which represents a $6bn+ TAM growing at a 5% CAGR through 2022, per Gartner. We view the acquisition as a step in the right direction for Blackberry’s endpoint strategy. Blackberry agreed to pay roughly 11x Cylance’s FY18 sales (year-end 4/18) and we estimate 6.7x CY19 EV/Sales. This estimated multiple is a premium to the peer group at 5.6x but fair for a high-growth private. However, we remain cautious given that Cylance may represent <20% of FY20E revenues and the endpoint market is intensely competitive. Blackberry’s stock also trades at 4.2x CY19E pro forma EV/S, which is roughly in-line with higher growth cyber peers like CBLK, FEYE, and PANW trading at 4-4.9x; we maintain Underperform.

A good addition to the portfolio, but tough market

While Blackberry has a strong mobile presence, Cylance brings more PC exposure and credibility for building a complete endpoint strategy. Focusing on Cylance’s Endpoint Security market, there is currently a major transition from legacy Anti-Virus to next-generation platforms (see primer). Cylance is a standout newcomer (founded in 2012), differentiating with Artificial Intelligence (AI) to block unknown threats. However, most vendors have now added some AI elements, and it remains a tough market. While it is positive that Blackberry may improve its endpoint presence, Cylance will put Blackberry in head-to-head competition with incumbents like Symantec, firewall vendors like Cisco/Palo Alto, and more startups.

Cylance helps growth; but near-term, valuation still risks

Cylance’s revenues grew 177% YoY in CY17 reaching $100mn+, per company disclosures. Based on management commentary, we forecast Cylance YoY revenue growth at 58% in CY18 and 32% in CY19. We continue to model a sustainable growth inflection for Blackberry in early FY21, but the pro forma growth rate improves to 5.2% vs our 2.2% YoY currently. At $8.97 stock price, the valuation goes from roughly 3.6x our CY19E EV/Sales to 4.2x CY19E EV/Sales when considering the acquisition. Given the valuation premium vs higher-growth cyber security peers such as Carbon Black and FireEye at 4x, the valuation may cap upside. We also continue to model a weaker 2H and FY19 vs management’s growth targets.

[rarsen]

OT for those interested in 5G capabilities:

5G mobile networks: A cheat sheet
https://www.techrepublic.com/article...a-cheat-sheet/

Tech companies are dialling down the hype around 5G mobile - here's why
https://www.zdnet.com/article/5g-mob...24037827013043

[EchoTango]

Now that the Cylance deal is a "fait-de-complete" I'm cautiously optimistic. I'm less pleased with the $1.4B price tag (even with all the post-purchase analysis and justifications) as I came to a significantly less valuation based on traditional metrics. One can only hope folks much smarter than me have made the numbers work on the conservative and not the overly optimistic side of financial/market projection models.

Running the company as a separate entity will tell if the current growth trajectory holds and there is some veracity to the company's performance projections. If not, this was one very expensive Unicorn and will have a profound negative effect on BB.

With the cash-to-debt ratio at roughly 1-to-1, let's hope we see some material profit growth soon to begin offsetting this large expense.

[Bacon Munchers]

Say,

Is the rumor of Chen selling ~2.8M of his stock true?

[Corbu]

Say,

Is the rumor of Chen selling ~2.8M of his stock true?

It is.

Looks like exercise of rights (RSUs) and disposition for tax purposes, per usual, to me.

[W Hoa]

BlackBerry is a cheap stock, Scotia’s Elliott Fishman says

“I don’t really know what to do with BlackBerry,” says Fishman to BNN Bloomberg. “What they do do now is great. They’ve found their niche and they’re staying in it and the company and the stock have acted quite well. In here, it’s cheap. If they’re going to throw around a billion dollars and it’s an $11 stock then you can sign me up for that.”

https://www.cantechletter.com/2018/1...-fishman-says/

[W Hoa]

Some current analyst projections. All dollars US

CIBC Institutional Equity Research's Todd Coupland upgraded BlackBerry from Neutral to Outperformer with an unchanged $14 price target.

Canaccord Genuity's T. Michael Walkley maintains at Hold, unchanged $11 price target.

TD Securities' Daniel Chan maintains at Buy, unchanged $14 price target.

MKM Partners' Michael Genovese maintains at Neutral, fair value estimate lowered from $12 to $10.50.

https://www.benzinga.com/analyst-rat...ce-acquisition

[smithm565]

Facebook v. BlackBerry update:

November 15, 2018 23
NOTICE Withdrawing Edward R. McGah, Jr. as Counsel of Record in this Action by BlackBerry Corporation, BlackBerry Limited. (Kapgan, Yury) (Filed on 11/15/2018) Modified on 11/16/2018 (cjlS, COURT STAFF).

November 13, 2018 22
NOTICE designating James R. Asperger as their lead counsel in this action by BlackBerry Corporation, BlackBerry Limited. (Kapgan, Yury) (Filed on 11/13/2018) Modified on 11/14/2018 (cjlS, COURT STAFF).

November 12, 2018 21
Certificate of Interested Entities by BlackBerry Corporation, BlackBerry Limited (Kapgan, Yury) (Filed on 11/12/2018)

November 12, 2018 20
Rule 7.1 Disclosures by BlackBerry Corporation, BlackBerry Limited (Kapgan, Yury) (Filed on 11/12/2018)

November 12, 2018 19
ANSWER to Complaint with Jury Demand , COUNTERCLAIM against Facebook, Inc. byBlackBerry Corporation, BlackBerry Limited. (Kapgan, Yury) (Filed on 11/12/2018)


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[smithm565]

BlackBerry v. Facebook update:

November 13, 2018 95
Notice of Appearance or Withdrawal of Counsel: for attorney Jeffrey William Nardinelli counsel for Plaintiff BlackBerry Limited. Adding Jeff W. Nardinelli as counsel of record for Blackberry Limited for the reason indicated in the G-123 Notice. Filed by Plaintiff Blackberry Limited. (Attorney Jeffrey William Nardinelli added to party BlackBerry Limited(ptyla))(Nardinelli, Jeffrey)

Posted via CB10

[smithm565]

BlackBerry v. Google :

Blackberry Ltd. v. Google LLC
Federal Circuit U.S. Court of Appeals
Case #: 0:19-bcaag-01145
Case Filed:Nov 01, 2018


Blackberry Ltd. v. Google LLC
Federal Circuit U.S. Court of Appeals
Case #: 0:19-bcaag-01146
Case Filed:Nov 01, 2018

Posted via CB10

[smithm565]

Uniloc v. BlackBerry. ~

Uniloc 2017 LLC v. Blackberry Corporation
Texas Northern District Court
Judge:Jane J Boyle
Case #: 3:18-cv-03069
Nature of Suit830 Property Rights - Patent
Cause35:271 Patent Infringement
Case Filed:Nov 17, 2018
Patent# 7,167,487

Case #: 3:18-cv-03066
Patent# 7,020,106

Case #: 3:18-cv-03068
Patent# 6,993,049

Case #: 3:18-cv-03065
Patent# 6,868,079

Posted via CB10