[JLagoon]

Hi all,

It looks like the stock hit the support line. I hope, it bounces back. There are 21 trading days to resolve the current pattern.

Daily chart:

[FeitaInc]

Hm.. BB stock is really performing poorly.

Any day now.

[Corbu]

Tough to watch, really.

What is it that we are missing, if anything?

[_dimi_]

I bought more at $ 5,80 yesterday. Not expecting an outcome from the FB lawsuit anytime soon (end of year probably) but the partnership with TCL coming to an end COULD very well have been a backup plan to sell off more hardware-related patents. Or, if they are selling the company (which doesn't seem to be the case) it would make sense to have the acquiring company decide what to do with BlackBerry's IP - if it's not highly succesful which seems to be the case with TCL.

[Seadog83]

I bought more at $ 5,80 yesterday. Not expecting an outcome from the FB lawsuit anytime soon (end of year probably) but the partnership with TCL coming to an end COULD very well have been a backup plan to sell off more hardware-related patents. Or, if they are selling the company (which doesn't seem to be the case) it would make sense to have the acquiring company decide what to do with BlackBerry's IP - if it's not highly succesful which seems to be the case with TCL.

Another week and another week of the disgusting same. All of the gains from last ER are gone, for no apparent reason.

Anyways, if BB does start selling off patents, does that really change anything in their books or on the PNL? Instead of $3b book value (or whatever) of which $500m is the FMV of patents and $400m is net cash, wouldn't it just shift the balance point to say $300m patents and $600m net cash? You could make the argument that cash is a more versatile asset than patents, but that would only get you so far.

The same thing when bears where making all the hubbub about BB selling off real estate. Whether you have a million dollar office you work in rent free, or a million dollars cash and pay rent, you're in roughly the same shape financially, so I never understood the issue.

[app_Developer]

I just participated in a round for a new AI startup that closed this week. One of dozens (hundreds) of good size AI deals just in SV alone. These are all companies that are growing rapidly as the world wakes up to ML/AI.

So I agree that patents won’t get BB far at this scale ($4B company!), but Cylance could. IF they execute obviously.

[app_Developer]

BB also has to stay on track and it seems they don’t have the structure yet to make good decision on priority. For example: the idea of making Cylance for Android devices is something you would expect to see brought up in a meeting or an internal proposal. You would also expect leadership to shut that down because it makes no business or technical sense. They should be more selective in what they invest in, and then execute more forcefully in the ones they choose.

[_dimi_]

Another week and another week of the disgusting same. All of the gains from last ER are gone, for no apparent reason.

Anyways, if BB does start selling off patents, does that really change anything in their books or on the PNL? Instead of $3b book value (or whatever) of which $500m is the FMV of patents and $400m is net cash, wouldn't it just shift the balance point to say $300m patents and $600m net cash? You could make the argument that cash is a more versatile asset than patents, but that would only get you so far.

The same thing when bears where making all the hubbub about BB selling off real estate. Whether you have a million dollar office you work in rent free, or a million dollars cash and pay rent, you're in roughly the same shape financially, so I never understood the issue.

IF their IP portfolio holds hardware patents that aren't generating much value for BlackBerry, then ending the partnership with TCL could very well be a first step towards an attempt towards unlocking more value. Either through one of their IP licensing partners, either through an outright sale of these patents. It could very well be that some hardware patents aren't worth much these days (getting to a decent smartphone market share isn't easy, and I'd think that the big smartphone manufacturers already hold whatever patents they need to sell smartphones in the U.S., Europe,...). Could it be that car manufacturers need to have patents similar to smartphones, just to be able to sell their autonomous 5G vehicles in the future? I have no idea. So I'm speculating here. I do believe that they will want to repurchase that convertible bond when it expires in November. If their case against Facebook had gone to trial in April, they *probably* would have had more cash in the bank by November. Now trial is postponed. But the convertible bond isn't needed any longer. Confidence among customers has returned, so they can probably pay back their bond so that the risk/chance of further dilution for investors is gone.

[_dimi_]

Another week and another week of the disgusting same. All of the gains from last ER are gone, for no apparent reason.

Anyways, if BB does start selling off patents, does that really change anything in their books or on the PNL? Instead of $3b book value (or whatever) of which $500m is the FMV of patents and $400m is net cash, wouldn't it just shift the balance point to say $300m patents and $600m net cash? You could make the argument that cash is a more versatile asset than patents, but that would only get you so far.

The same thing when bears where making all the hubbub about BB selling off real estate. Whether you have a million dollar office you work in rent free, or a million dollars cash and pay rent, you're in roughly the same shape financially, so I never understood the issue.

To answer your question: I don't think that is how it works. In the case of BlackBerry, it might seem that the more cash they hold, the better. But before BlackBerry becomes profitable or gets acquired, they'll want to get rid of that bond.

I don't think they can do a truly meaningful acquisition for 600 million dollars anyway. Just look at what they paid for Cylance. So if BlackBerry is "eventually" acquired or becomes profitable (share price would probably trade on a P/E basis), it makes sense to keep the share pool as small as possible.

[Rice Dawg]

Tough to watch, really.

What is it that we are missing, if anything?

There is that old saying, it's always darkest before dawn.

As a contrarian, I find the pessimism and the overall dearth of enthusiasm and speculation encouraging in that respect. These are the conditions necessary for a stock to truly bottom -- when there are no more believers. This is close to what that feels like.

Of course, it's also 100% necessary for the company to execute better. I've seen plenty of stocks that bottomed... and stayed there.

I don't believe BB is comparable to those gutter dwellers (yet). Those are usually businesses stuck in secular declining industries (e.g. print advertising, landlines, etc.) and/or so overburdened with debt they are forced to fork over every ounce of cash flow towards interest & principal that they cannot reinvest in the business and grow.

After last quarter's report, I think it's probable to assume that 1.) ex-COO Bryan Palma tried to shake things up but executed so poorly that he was forced to exit, and 2.) the Cylance acquisition has not gone as smooth as management has advertised.

Regarding Palma's short legacy, Enterprise Software & Services basically went in a straight line down from $96M in fiscal Q3 2019 to somewhere in the mid-$70M in fiscal Q2 2020 (frustrating that they stopped disclosing it after lumping it in "IoT", but the conference call mentioned a negative mid-teens decline YoY). Don't be hoodwinked by the term "recurring revenues" -- that just means it's subscription based. It doesn't mean revenues will recur. It appears during his tenure, they suffered pretty serious churn in ESS and was not able to replace it fast enough by closing new deals. To be blunt, that kind of decline in a SaaS business is a five-alarm fire, and investors are not irrational to reduce the P/S multiple in light of such a drop-off.

It's encouraging ESS grew sequentially in FQ3 2020, but again, we don't know how much because they stopped disclosing it and no one asked on the conference call. I swag it somewhere in the low $80Ms, assuming BTS/QNX grew at the same sequential rate YoY and then backing that out. This is a little better, but it's still far from satisfactory. For comparison, two years ago in FQ4 2018, they generated $108M from ESS.

I don't believe the Street will give BB credit until ESS has at least 2-3 quarters of consecutive sequential growth again. I for one am definitely hesitant. I really think, for the short/medium term, it's just that simple. Grow ESS again, and the stock will re-rate towards a 3-4x P/S multiple. Flatline or down, the stock will stay in the crater. The silver lining here is that at least the market is a growing one, and their government business should provide a solid base as they seek to expand other verticals. SaaS sales is as much science as it is art: generate good leads, train and incentivize your sales force properly, and treat customer success seriously. ESS will probably never be a consistent double-digit grower again -- the UEM product is tough to sell and implement compared to other enterprise cloud products like Zoom or Slack, not to mention all their competitors (except MOBL) are 10x bigger -- but even a stable single-digit grower with a defensible turf can generate significant cash in a mature state (a, say, $500M annual run-rate with industry-standard 30% margins is capable of $150M in FCF every year) and be very valuable.

Regarding Cylance, our fears of slowing growth manifested itself in the FQ3 report. The forecasted full-year 25-30% growth was reduced to 20%. ARR growth was down to 15%, net dollar retention sank below 100%, and actual YoY revenue growth was a relatively depressing 13%. These numbers do not justify the 6-7x P/S multiple that John Chen paid. Management came clean and admitted their product suite was inadequate, lacking both a good EDR product as well as a single-agent solution, which held them back in competitive bake-offs vis-a-vis their competitors. CrowdStrike is mopping Cylance under the table.

Look, acquisitions are hard. Integrations are hard. Founders leave, key people get poached, and costs have to be cut. Growth at all costs become profitability at all costs. The culture changes. This is why the majority of M&As destroy rather than create value. The hiccups here at Cylance should have been anticipated, but the fundamental backdrop is still favorable. It's a massive market with massive incumbents (traditional anti-virus vendors) shedding market share. A stabilized and integrated Cylance should still capture a decent portion, and a return to 20+% growth can still be achieved. FQ4 2020 will be an important proof point on this front, otherwise we may be looking at some Goodwill write-off in the near future.

BB also slyly lowered their full year revenue guidance again in their FQ3 report. At first it was 23%-27%, then in FQ2 it was lowered to 23%-25%, and now, Chen says they are "comfortable" with Street estimates of around $1.1B... which equates to a 20% YoY growth rate. Sell-side analysts didn't call him out on it in the Q&A, but the buy-side won't miss this fact. With ESS missing badly (originally forecasted around 12% growth in their analyst day and but instead looks like it will decline around 10%) and overly optimistic Cylance projections coming back down to Earth, John Chen has lost a lot of the credibility that he carried into the BlackBerry job in 2013 when he was known to be a CEO who always hit his numbers. This also accounts for why BB trades at a historical discount... again, deservedly so.

This is all to say that it's not unreasonable where BB is trading now. But as usual, I'll end on a more positive note. ESS showed some green shoots in FQ3. If my swag estimate of low-$80M is close, that's a high single-digit sequential growth rate. Another quarter of that and we'll be back close to $90M, and on the way towards $90-100M per quarter run-rate and perhaps close to $400M for FY 2021. That would be close to topping the numbers for FY 2018 (the year BB went up 60%). It's hard to handicap the probability of this happening, but on the flip side, it's doesn't seem like the market is pricing any of this in the current share price.

BTS/QNX continues to shine. I don't get the moaning about how all these QNX partnerships have yet to translate into revenues. It absolutely has. In FY 2017 when they first broke out BTS revenues, it came in at about $150M. In the last twelve months, it has totaled about $230M, and it will probably be close to $240M for the full year. That's about a growth rate of 17% per year. It's not spectacular, but it's still strong and more importantly, still very early days, as all the growth has probably come from legacy infotainment royalties. ADAS/Hypervisor royalties are more valuable, and more will roll in starting this year if Chen's estimate of a three year gestation period is accurate. A royalty-based business generating over $240M in annual revenues with, say, 15-20% growth for the next 5-10 years in a zero interest rate world is worth billions. Math proof: $240M compounded at 15% over 10 years is $970M -- what would a cheapskate pay for that high margin revenue stream? 3x? Even if you discount that back with a 10% discount rate, it still comes out to over $1 billion. A large strategic acquirer would probably pay more than 3x and apply a lower discount rate.

This is why it frustrates me John Chen insists on lumping QNX with ESS. It's hard to tease out the valuation, now even more so without transparency. Mixing raisins with turds still leaves you with turds. My speculation is that beyond using QNX to cover up ESS's flaws, he's also making it more difficult for other companies who wish to buy QNX to submit a bear hug offer that looks generous in the short-term but undervalues it in the long term. Recall that prior to BlackBerry owning QNX, it was actually owned by automotive tier-1 supplier Harman. I believe any of the major Tier-1s would buy QNX in a heartbeat and they have the capital to do it, all of whom generate billions in cash flows per year. Just based on the napkin math above, if any one puts in a $1B "low-ball" offer, which is a full 1/3rd of BB's current enterprise value, BB's board would be fiduciarily required to evaluate the offer. In the short run, adding $1B to the bank sounds amazing, especially to long suffering shareholders. But if they lose QNX, BB is basically left with shallow-moat UEM/Cylance products with big, rich, vicious, talented competitors and might as well sell itself completely. Even with Fairfax in control, minority shareholders (or Watsa's various hedge fund nemesis) can make enough of a ruckus to distract management. Tangling it with ESS under "IoT" makes it messier and perhaps dissuades those deep pockets. At least, that's the most charitable reason I can come up with for making this organizational move -- it's so valuable they're trying to camouflage it with sprinkles of turd.

Finally, BB is back to free cash flow positive. I believe part of the reason for BB's low valuation is it's kind of an orphan stock that doesn't yet generate meaningful FCF to entice traditional value investors but also doesn't generate enough pure growth (or Musk-ian hype) to entice momentum investors. John Chen's record for growing companies is suspect, but he has true bona fides in controlling costs and generating profits. Prior to the Cylance acquisition which burdened BB with $200M in opex, FY 2019 generated EBITDA margins of 20% and free cash flows of $83M. The latest quarter had EBITDA margins back into the mid-teens and FCF of $37M. If ESS stabilizes, there is a good probability these metrics continue to improve in FY 2021 and we see something around $150M in FCF for the year. Net cash balance will top $500M and should enable the board to green light share buybacks again after they retire the debentures.

[_dimi_]

Well said, Rice Dawg!

[JLagoon]

Rice Dawg, thank you for the awesome analysis. 👍👍

[Corbu]

I want to add my voice to what my enlightened friends have just said. Brilliant job, Rice Dawg... Many thanks.

I'll add this, from a recent BA/ML report:

Key takeaways from management meetings: right assets, right markets

Key takeaways from management meetings

We hosted meetings with Blackberry management and came away more confident that Blackberry has quality assets in attractive markets. Head of IR, Chris Lee, highlighted the company’s Spark platform underpinned by three product families: 1) unified endpoint management (UEM), 2) Cylance endpoint protection platform (EPP), and 3) embedded software. The growing trend of converging UEM/EPP into what is being dubbed Unified Endpoint Security (UES) was also a focus area. New products for Cylance, continued QNX auto traction, and sales team realignment all help improve the FY21 set-up for the core business. These positives are partly offset in the near-term by Licensing headwinds and more work needed to refine the go-to-market efforts, in our view; maintain Neutral.

Right assets, right markets, but time to execute

Blackberry continues to make progress on uniting its historically disparate businesses, which had stemmed from legacy technologies and acquisitions. We continue to view Cylance and QNX as quality assets and believe the UEM portfolio sits in a valuable intersection of mobile, application, and content visibility. Management stressed Cylance’s strong position in the $14bn Endpoint Security market, poised to grow at a 30%+ CAGR. UEM and Athoc crisis communications also address roughly $3bn markets each growing at 9% and 34% CAGRs, respectively. As many of these areas begin to converge, Blackberry is one of few vendors with all necessary assets to provide a unified approach. Still in the near-term, management must continue to turn around the core UEM business and improve go-to-market to remain relevant in competitive markets.

New products and Spark platform make progress

The key to unifying the products, which we believe would help with technology differentiation and more efficient go-to-market, is the Spark platform. Management cited progress with developing Spark and highlighted new offerings such as Mobile Threat Defense and Blackberry Intelligent Security which leverage the platform. We also flag recent Cylance product enhancements, such as EPP and EDR in a single-agent and managed defense, both of which should help maintain growth into FY21.

[W Hoa]

On the technical side BB has been for the last few years a fairly consistent RSI play. Here we are yet again as BB has bounced off RSI=74 and is currently sitting at RSI=35. It consistently ping-pongs between, roughly, RSI=30 and RSI=70.

[Corbu]

The rest of that BB report

Key takeaways from investor meetings

Enterprise: worst behind us, but better execution needed

Much of the discussions touched on the core Enterprise business, which represents roughly 30% of sales. Management expressed confidence in stabilizing the segment in 3Q following weak trends with 1H20 when sales declined roughly 7% YoY, per our estimates. With increased sales hiring in recent quarters and CEO John Chen now closely involved with operating the business segment, Blackberry is eyeing a slow but steady turnaround. One challenge remains uniting disparate businesses also within the Enterprise segment, mainly UEM, Athoc, and Secusuite. We believe a shift from siloed sales teams to cross-technology sales coverage could drive both upsell opportunities and go-to-market efficiencies. Though the UEM market remains competitive, we believe Blackberry maintains sticky relationships with regulated enterprises and government agencies. We anticipate stabilization to continue into 4Q and renewed sales efforts should help turn the culture from maintaining Blackberry’s renewal base to hunting for new logos.

The revamped Athoc efforts also remain early, but we believe the technology positively addresses an attractive market opportunity. Crisis Communications represents a $3bn market opportunity growing at a 34% CAGR 2018-21, per Blackberry. While we believe Athoc may trail peer Everbridge on some features, Athoc’s FedRAMP certification and SaaS offering combined with Blackberry’s regulated/government relationships remains a growth opportunity. Separately, we believe the Secusuite pipeline continues to include a few potentially large government deals that have been closing in smaller increments than previously expected. Though timing remains uncertain, the nature of in-period revenue recognition for Secusuite deals could help drive Enterprise upside.

Core Enterprise and Cylance business convergence

While the Enterprise and core UEM business continues to face tough competition from the likes of Microsoft, VMware, Citrix, MobleIron, IBM, and others, the complimentary Cylance acquisition may help Blackberry differentiate in the market. Management focused on the convergence of UEM and EPP/EDR platforms into a complete Unified Endpoint Security platform. This market shift is expected to be supported by trends such as CIO/CISO convergence and a general customer desire for platform consolidation. Positively, Blackberry’s Cylance acquisition puts the vendor ahead of this trend, a strategy also validated by VMware’s acquisition of Carbon Black. We believe there is potential for fewer competitors with true UES at this stage, likely narrowing the field to Blackberry, VMware, and Microsoft.

As Cylance and UEM potentially begin to merge, Blackberry would also benefit from goto- market synergies. Cylance historically focused more on SMB/mid-market customers and had been drifting upstream into larger Enterprises at the time of the acquisition, per management. Conversely, Blackberry’s UEM customer base spans larger enterprises in regulated industries and large governments. Should Blackberry develop a more closelyknit Cylance/Blackberry sales team, we believe that this could help accelerate cross/upsell in both the enterprise and mid-market segments.

Cylance still leads with AI, now adds single-agent

Management reiterated confidence in the Cylance strategy as the acquisition marries fixed endpoint capabilities with Blackberry’s mobile focus, and brings valuable artificial intelligence (AI) expertise that can be leveraged across the business. We believe Cylance remains a leader in the EPP market amongst next-gen vendors like Crowdstrike, Carbon Black, SentinelOne, and others, and we model Cylance growth at roughly 22% in FY20. Still, growth is decelerating in recent quarters and was particularly impacted by a customer loss in 3Q20 that impacted growth negatively by 5%. We believe this customer left Cylance due to the lack of single-agent EPP/EDR. Cylance lagged competitors on single-agent EDR due to its roots in next-generation antivirus, versus peers such as CrowdStrike with roots in EDR. In our view, enterprises have begun to prioritize EDR capabilities over strong next-generation antivirus due to high false positive rates and in some cases agent bloat that slows down the endpoint.

Cylance recently announced several new products, including the single-agent EDR through its OPTICS 2.4 CY4Q19. Management believes the single, lightweight agent delivering both EPP and EDR greatly improves Cylance’s competitive position. Cylance also now offers GUARD, which is a 24/7 Managed Detection and Response offering. CylanceGUARD was introduced in July 2019 and should gain traction in FY21. Lastly, CylancePERSONA’s behavioral analytics and biometric authentication represents another recent innovation that could be more widely released in FY21.

QNX showing strong traction with design wins, partners

The top area of investor interest was Blackberry’s QNX business and auto opportunity. Management sounded positive on recent design wins and differentiation through QNX’s real-time operating system (RTOS) and safe certifications. We believe the auto business has outgrown QNX’s other verticals and we estimate auto may now represent close to 80% of QNX sales. This is likely reflective of both management’s focus on the auto opportunity and growing software content in cars.

Specifically, management believes QNX is gaining share in newer applications, such as advanced driver-assistance systems (ADAS) and digital instrument clusters. The top competitor remains Green Hills while Automotive Grade Linux and Android Auto are relevant in the infotainment systems. Management described a lengthy timetable for design wins taking roughly 3-5 years to get to production. In the early phases, QNX sales are typically more weighted to consulting services and development fees, while the royalties per car hit the model once the cars finish production. Given that QNX has had a leadership position in auto embedded software for decades and is now in 150mn+ cars, there are constantly shifts in the model from various design wins. For instance, sales from older infotainment design wins could decline as new infotainment and ADAS systems ramp. Management generally sees this resulting in growth for QNX as automakers like Ford and Land Rover leverage QNX further across the vehicles.

In our view, it remains early days for QNX’s ADAS systems and self-driving car opportunities. Importantly, QNX maintains strong relationships with leading chipmakers like Qualcomm, Nvidia, and others, and platform providers like Baidu. With presence in 150mn+ cars, management believes QNX has relationships with almost all automakers except for roughly <5 (including Tesla). The pricing and monetization of such advanced applications remains opaque but the QNX’s potential role in self-driving cars is a key positive, in our view.

QNX maintains market presence outside of auto, including industries such as energy, medical, transportation, and manufacturing. We believe the software could be used in a wide range of IoT applications. However, Blackberry faces the challenge of marketing to a wide range of buyers and applications. Management implied some renewed focus outside of auto, and we see opportunities to open the software more to develop an app ecosystem around QNX longer-term.

New applications for Spark platform show progress Management described UEM, EPP, and QNX as the three primary pillars of the Spark platform. With the market beginning to merge UEM and EPP into UES, we believe the Spark platform is naturally becoming more of a reality. Given that Microsoft is one of the closest competitors for UES mainly stemming from its dominance with Windows OS, in theory QNX could begin to fit nicely as a leading IoT OS. However, we believe this is still in theory and it remains early for the Spark platform. In our view, there is more work to do in terms of clear use cases and customer adoption, but it is a sound vision.

Management did outline two examples of how Blackberry is introducing new applications based on the Spark platform. First, the Mobile Threat Defense (MTD) offering, first introduced CY4Q19, layers CylanceProtect with UEM apps such as Work and Access for better mobile protection. Second, management highlighted Blackberry Intelligent Security (BIS) which dynamically adapts security policy to user location, device, and behavior for more seamless access. We see BIS potentially merging with CylancePERSONA over time. Lastly, similar to QNX attracting application developers, we see potential for Spark to become more open and adopted by developers over time.

Licensing likely faces some headwinds

Lastly, we maintain our view that Licensing (roughly 28% of sales) may face a few headwinds related to the recent TCL announcement (see note). Management described its Licensing segment broken into two main categories: 1) legacy technology licensing, and 2) intellectual property licensing. The legacy technologies were primarily related to a BBM licensing deal with Emtek, and three brand/handset licensing deals with TCL, BB Merah Putih, and Optiemus Infracom. Based on press reports, Emtek and TCL appear to be at risk of declining at some point in FY21, in our view. We estimate this represents a $40-$60mn potential revenue headwind.

The IP Licensing relates to Blackberry’s 37k+ patent portfolio and management reiterated the average life of roughly 10 years. Management expressed confidence in growing the IP Licensing sales through a mix of direct efforts and indirect efforts through partner Teletry. The pipeline of opportunities remains robust, yet deal timing could be volatile. Lastly, Blackberry’s litigation efforts with Facebook, Twitter, and Snapchat over messaging IP are still ongoing.

Price objective basis & risk

Our $7 PO is based on roughly 3x EV/S on our CY21E software sales. This multiple is roughly in line with other low growth/challenged software/services companies and supported by our sum-of-parts valuation.

Downside risks to our PO are: 1) Slowdown in smartphone or enterprise software market due to macroeconomic weakness, 2) Margin pressure from SAF decline and low software growth, 3) Competitive risks from Apple, Google (Android), Samsung, VMware, Microsoft, and more, 4) Increased investment required to support new products, and 5) Security breach and reputational risk.

Upside risks to our price objective are: 1) Success of new product launches, 2) Restructuring efforts, asset sales, or transformative M&A, 3) large unexpected IP deals.

[curves2000]

I have said it before and I will say it again. I think BlackBerry has the product portfolio and the technical knowledge to really grow the revenues and the business into a market leader and powerhouse.

What I really do think they are lacking and continue to lack is on the sales and execution front.

It continues to puzzle me me with all the growth in the security business and the non stop level of hacks, threats, disruptions and continued chaos that BlackBerry is still struggling to grow revenues in this space.

What type of business activity is happening at these security summits BlackBerry is hosting and paying for?? Are they gathering clients in a room and explaining what is new and exiting at BlackBerry and than letting them walk out the door after eating and drinking??

They used to report how they were processing 3000+ sales transactions a quarter yet revenues are pretty much flat. Why aren't they able to close 100 deals @ $500k to a $1 million ???? For the largest financial institutions, law firms, energy companies, and other global corporate giants, these million dollar spends are literally a rounding error, especially for security.

I really don't know what's going on but I don't like the odor that is coming from the sales team. This lack of sales execution resembles in small part the lack of success BlackBerry Mobile had with the K series.

I recall the launch for the Key 2. At the event they had a great presentation and the device really was a great upgrade over the Key 1. They had a "pop up showroom" where people could touch and feel the device. It didn't occur to anybody to align the launch, availability date and have a credit card processing machine on hand to actually sell some units. Let's tease everybody and let them wait several weeks.

I understand that BlackBerry Mobile was run by TCL, but TCL literally hired a ton of BlackBerry Ltd employees who worked in the device business.

Anyhow, I hope I am wrong but I really do hope that the upcoming quarters show some serious growth. I've been a shareholder since 2011 and my patience for growth is running THIN.

Posted via CB10

[Chuck Finley69]

I have said it before and I will say it again. I think BlackBerry has the product portfolio and the technical knowledge to really grow the revenues and the business into a market leader and powerhouse.

What I really do think they are lacking and continue to lack is on the sales and execution front.

It continues to puzzle me me with all the growth in the security business and the non stop level of hacks, threats, disruptions and continued chaos that BlackBerry is still struggling to grow revenues in this space.

What type of business activity is happening at these security summits BlackBerry is hosting and paying for?? Are they gathering clients in a room and explaining what is new and exiting at BlackBerry and than letting them walk out the door after eating and drinking??

They used to report how they were processing 3000+ sales transactions a quarter yet revenues are pretty much flat. Why aren't they able to close 100 deals @ $500k to a $1 million ???? For the largest financial institutions, law firms, energy companies, and other global corporate giants, these million dollar spends are literally a rounding error, especially for security.

I really don't know what's going on but I don't like the odor that is coming from the sales team. This lack of sales execution resembles in small part the lack of success BlackBerry Mobile had with the K series.

I recall the launch for the Key 2. At the event they had a great presentation and the device really was a great upgrade over the Key 1. They had a "pop up showroom" where people could touch and feel the device. It didn't occur to anybody to align the launch, availability date and have a credit card processing machine on hand to actually sell some units. Let's tease everybody and let them wait several weeks.

I understand that BlackBerry Mobile was run by TCL, but TCL literally hired a ton of BlackBerry Ltd employees who worked in the device business.

Anyhow, I hope I am wrong but I really do hope that the upcoming quarters show some serious growth. I've been a shareholder since 2011 and my patience for growth is running THIN.

Posted via CB10

The biggest problem is that large scale players like Apple, Google and Microsoft aren’t just sitting by watching BlackBerry Cylance grow the business when the big three have similar objectives and goals to grow their shareholders assets too

Add in the other Enterprise software players too. Better capitalized middle tier players also.

[kadakn01]

The biggest problem is that large scale players like Apple, Google and Microsoft aren’t just sitting by watching BlackBerry Cylance grow the business when the big three have similar objectives and goals to grow their shareholders assets too

Add in the other Enterprise software players too. Better capitalized middle tier players also.

Blackberry was once better capitalized than Apple, all the auto makers were better capitalized than Tesla. Just food for thought. As an aside, i feel the risk reward is interesting given the increase in revenue (finally) against the lowest multiple the company has ever traded at (that i can remember). Also rumor has it, that another fruit company could be next if the other IP suits go as expected.

[Corbu]

Awesome to see you around, kadakn01. Don't be a stranger!

[Chuck Finley69]

Blackberry was once better capitalized than Apple, all the auto makers were better capitalized than Tesla. Just food for thought. As an aside, i feel the risk reward is interesting given the increase in revenue (finally) against the lowest multiple the company has ever traded at (that i can remember). Also rumor has it, that another fruit company could be next if the other IP suits go as expected.

Exactly when, as you say, was BlackBerry ever better capitalized than Apple?

[_dimi_]

Another example of a low-capitalized company (+/- 100 million in net cash) that has done extremely well for shareholders...

Have a look at Everbridge (EVBG), AtHoc's number 1 competitor. They went public around the time that BlackBerry bought AtHoc. Now it is worth 3.1 billion dollars. Could be overvalued, but look at their growth numbers... damn.

[Rice Dawg]

I saw some posts worrying about how BB has lagged the S&P/Nasdaq, not to mention the hottest tech stocks, so badly over these past few years that it's nearly mathematically impossible to catch up at this point. I think for those who are still holding shares with a cost basis > $40+ dating back a decade or more, yeah, it's probably curtains at this point. But if you came in post-Chen in 2014, I don't think the fat lady's singing just yet.

Public stock prices do not move in a linear, rational manner. Stocks double/triple within very short timeframes all the time. Just two brain-dead examples make my point: 1.) AAPL, the world's biggest market cap, moved up 86% in 2019, and 2.) TSLA, a $100 billion market cap, has tripled in the last six months.

The point is not whether BB will act like AAPL or TSLA. The point is stock prices are often irrational and do not reflect "success" in a linear manner. More often than not, it's a bum rush at the end because it's so tempting to try to time trades perfectly and brag about a triple digit IRR on Twitter.

Okay, so AAPL and TSLA are bad examples. How about Sybase then? Here's a chart from when John Chen took over to when he sold it to SAP in 2010:



That's about a period of 12 years. You'll notice most of the ramp happened in the final two years. For the rest of the time, it was basically stuck in the teens and the $20s (divide that by 2 and you'll kind of get an analogous feel for BB's stock price action). Years and years it bounced in that range before it nearly tripled. Meanwhile, revenues in FY 2007 to FY 2009 only went from $1.02B to $1.17B (although operating income did go from $168M to $289M thanks to cost efficiencies -- more evidence of Chen's opex discipline).

Of course, there's the counter-argument that the S&P itself did almost nothing during that period as it suffered two bubbles (dotcom and fin crisis) while in this period the S&P has doubled since 2013. Fine. But that doesn't preclude the S&P crashing again in the next few years, during which if BB holds up well, the comparison completely resets.

The overarching point is that all of this is unpredictable, and a hyperfocus on day to day stock price action and just extrapolating linearly is almost complete noise unless you're a great trader.

[rarsen]

Remaining careful with reliability of "The Motley Fool’ articles:

Amazon (NASDAQ:AMZN) Just Decided That it Needs BlackBerry (TSX:BB)
https://www.fool.ca/2020/02/15/amazo...ckberry-tsxbb/
"In recent weeks, the company teamed up with BlackBerry (TSX:BB)(NYSE:BB) to co-launch a technology suite for autonomous vehicles. Gartner predicts that nearly one million self-driving vehicles will be added to the road each year starting in 2024. By the end of the decade, tens of millions of autonomous vehicles could be hitting the road annually. With BlackBerry by its side, Amazon’s products instantly gain security credibility. They also benefit from existing relationships considering BlackBerry’s software is already being sold to dozens of global vehicle manufacturers. As autonomous vehicles take off, don’t be surprised if Amazon acquires the company outright."

[FeitaInc]

As autonomous vehicles take off, don’t be surprised if Amazon acquires the company outright."

Just make sure that bid comes in at somewhere north of USD30 per share.

[Dunt Dunt Dunt]

Remaining careful with reliability of "The Motley Fool’ articles:

Amazon (NASDAQ:AMZN) Just Decided That it Needs BlackBerry (TSX:BB)
https://www.fool.ca/2020/02/15/amazo...ckberry-tsxbb/
"In recent weeks, the company teamed up with BlackBerry (TSX:BB)(NYSE:BB) to co-launch a technology suite for autonomous vehicles. Gartner predicts that nearly one million self-driving vehicles will be added to the road each year starting in 2024. By the end of the decade, tens of millions of autonomous vehicles could be hitting the road annually. With BlackBerry by its side, Amazon’s products instantly gain security credibility. They also benefit from existing relationships considering BlackBerry’s software is already being sold to dozens of global vehicle manufacturers. As autonomous vehicles take off, don’t be surprised if Amazon acquires the company outright."

Yes the "fool's" Dreams and Fantasy... much like when BlackBerry "partnered" with Google, Microsoft and Samsung.

I suspect BlackBerry needs AWS Edge Computing capabilities much more than AWS needs QNX.