[fin2007]

So let me understand something here. They write of close to a billion due to inventory of unsold phones.
But the phones still have a value.
Will that not add to bottom line in the next quarter or two when they are eventually sold?
Is this just accounting practices ti decide when to take a loss or profit. Could this inventory been there the precious quarter as well?

Posted via CB10

Basically the writeoff took $2 per share down from book value. That is why book value is so misleading. BBRY has $6+ are on their inventory.
If they could not sell those and later sell at deep discount, it would mean $6 is cut from the book value, and its book value will drop to $12 right away.

Yes, if they can sell those later, they would get some back, but you can ignore that.

[fin2007]

For the second quarter, the Company expects to recognize hardware revenue on approximately 3.7 million BlackBerry smartphones, so if we are really really really generous - and say 49% are BB10 (and that would be highly generous) - that would be about 1.8 million?

• 1.2 Greyw0lf01
• 1.5 Tyler Nelson
• 1.7 Marc_Paradise
• 1.75 m0de25
• 1.8 Nquyen
• 1.9 Seawarrior
• 1.96 Chrysaurora
• 2 Andrew4life
• 2 lcjr
• 2.1 Khf227
• 2.1 Birdman_38
• 2.2 ibpluto
• 2.2 Notfanboy
• 2.2 OMGitworks
• 2.3 CGK
• 2.35 Scalemaster
• 2.4 Bugmapper
• 2.41 Randeman
• 2.5 Abouthsu
• 2.5 Njblackberry
• 2.5 Kid Vibe
• 2.6 BrandonPBaby
• 2.6 Jay_men
• 2.7 Gesig Boek
• 2.8 Koolrosh
• 2.8 _dimi_
• 3 Chris2J
• 3 epyon52238
• 3 Superfly_FR
• 3 Sidhuk
• 3.15 Bungaboy
• 3.2 Komoto
• 3.3 Tariq Nasir
• 3.4 Focusedberry
• 3.4 Ribes Nigrum
• 3.7 Cjcampbell
• 3.8 Playbookster
• 4 Morlock_man
• 4.2 Delil
• 4.4 w4rrior
• 5.4 Undone
• 5.5 Herol
• 5.9 Silversun10
• 6 The Rock
• 7.5 Shanerredflag
• 9 Soumaila Somtor

you should read the release, almost all of the 3.7M are BB7 phones.

[Gesig Boek]

Did some-one in BB conspire to kill the company.

- Kill consumer sales with expensive phones with high margins (Still >35%) they cant sell.
- Pre-announced search for buyer to kill enterprise sales.
- Spoil BB Z30 and xBBM with "leak" about lay-offs.

Did BB management do anything not to sabotage the company?

[BergerKing]

OK, folks have had a chance to cool off. Gonna lay it down flat, and clear, the personal attacks and launching off on members will be dealt with on an individual basis. I know people got hurt, some took a bath, and it wasn't water in the tub. This turned into a bad day, but you all have different takes on things. Be respectful, or step away personally, that's the way to handle it.

[Andy_bb_king]

OK. I will add first note after it is reopened. I repeat, be strong and stand up. Do not sell this until it reaches $40.00. The layoff should be done long time ago. It is time to bring in big equity partner.

Posted via CB10

[Andy_bb_king]

I wish Harper to be smart at least for one time and allow foreign company to partner with BlackBerry or buy the asset from BlackBerry.

Posted via CB10

[JLagoon]

Will there be the R&D tax incentive? Isn't it every quarter?

[dusdal]

I think it was an annual credit.

Posted via CB10

[dusdal]

How many Z s must there be for a Billion $ write down?

Should we assume they are marking it down from cost to $0 ?

Posted via CB10

[cjcampbell]

How many Z s must there be for a Billion $ write down?

Should we assume they are marking it down from cost to $0 ?

Posted via CB10

I'd guess in the 3.5-4 million area.

[kadakn01]

I posted this on the other thread "StockBerrians" since this was closed and added a few comments.....

First a question to Morgan, the gap down to about $8 was filled today. Thoughts on that as it bounced nicely of it.

Also on a separate note with respect to the GAAP loss of about a billion on the Z10 what is evident to me is that they are planning to use the this device as the entry level phone along with the Q5 (Z30 and Q10 are the flagship devices now) and are thinking to take the hit now and price it as low as possible which will have a positive impact on cash when they recognize the sale as long as it is above Zero.

Think of it this way, say the cost of each device is $350 and they written it down to zero (hence GAAP loss of $350) if they sell it for anything it is a net positive on earnings. It would also help a buyer as it spruces up the book value of the company, although I still think a partnership is a better long term deal for shareholders.
Further more the high margin business the service revenue will be even more greatly recognized after the write down. The book value decrease to about $16 or so and TBV around $9 still gives us a worse case scenario. I agree that pre releasing the info is interesting given he timing of X-BBM but perhaps the rumour mongers will be put to rest and we can move forward making a smaller company that is profitable.

[damthrill]

it's been a while so I will comment on the situation. "Boy oh boy..." I guess I enjoy pain, because I am sticking around. I have thousands of shares and I am not going to sell. Morgan, you must be a good father because you can take a bad situation and make light of it( at least make me feel better). At the end of the day, since I got my Z10 I have been much more productive and I work in Agriculture. That's right, I have to get it done out of my pickup and I do a lot more seemlessly since the Z10. IMO I believe BB has excellent technology.

[Komoto]

For the write down, i think the value is more like 750 mil.

As they said loss for the year was 250 mil before writedown and 960 after. Correct?

Interesting day yesterday, i was out and about. I just got a message from my brother saying have you seen the news on blackberry. I knew then it would be amazing or really bad. load up cnbc down 20%. Ouch.

My take on the whole thing is as follows:

Plan A failed, moving on to Plan B. Plan A was the smooth transition of BB from 7 to 10 and from Hardware to Software. This was meant to happen over a number of years and the margin from handset sales was going to subsidise losses to the service revenue whilst BES10 started to gain traction.

It seems as though BB10 handset sales did not catch on in the consumer market. The enterprise market is much slower to adopt the new OS. They have to wait for budgets, testing etc.

Plan B is the immediate shift to this new model. There are some risks involved here, i personally think they should have tried to do this from the beginning 2 years ago. Advantages are reduction in staff costs and also marketing budget should be slashed completely as they are now b2b. Focusing on one paricular product is the way to go, i think.

In the future as we have said they should be BBM, MDM, M2M, and BB10.

Obviously they have some risks now in that MDM uptake may not have been so great, this is the biggest risk as they really are hinging the future of the company on this. BBRY is being dragged through the mud atm and I hope that this doesnt affect their other products too badly.

I think this just became a much longer story. I think we have to look about 2 years out from now.

I am trying to determine what this means for the handset business. Is it worth nothing now?

I'm actually happy about the news that they are out of the consumer handset market, I just don't like the effect it had on the stock! haha I feel as though, they are performing the transition very quickly.

This story is long from over. Everyone kicks the guy when he is down, it is natural human behaviour, i dont hold it against people.

Thoughts...

[dusdal]

http://forums.crackberry.com/showthread.php?t=851651


Posted via CB10

[cgk]

http://forums.crackberry.com/showthread.php?t=851651


Posted via CB10

Oh lord, are people still clinging to that fantasy? Wake up, Heins isn't Steve Jobs.

[Superfly_FR]

My Ego got hurt. As an individual, I got hurt. For people at BlackBerry, I got hurt. I feel - while I believe warnings were sufficient - responsible for those who had to sell at loss (whatever the reason) after they joined our gang. And this wound is by far the biggest, hardest to swallow.

This is a true "sorry my bad" post. But we have to move on and stop "crying ". Therefore I won't elaborate about this in later posts.

Now, about the current situation, I need to step back and wait the dust to settle and the scenario and actors to be casted (or fired) before I can accurately set my mind.

Right now, I hold. As unpleasant these news are, I believe they serve the company as drastic measures in opposition to a stubborn march that - obviously - no player has agreed with.
Due to the non critical sizing, I believe going private is now a good thing and legit historical head come back a positive message.

P.S : I also have a thought for CB team, as many other friends I have, blogging and animating BlackBerry communities. I can feel how they feel.

No kidding that's my Q10 boss !

[Komoto]

Steve Jobs didnt make Apple. He is dead now and the company still potters on, doesnt it?

Have you ever seen a company change its direction, change the products it focuses on?

I have done it in my own company. It is a painful process.

[INTz]

Well it's 530 am and I got it all out of my system. Beer and whiskey shots does the trick. Feeling good and ready for the next rally.

Balls of steel.

Posted via CB10

[greggebhardt]

I used the ACAD money to buy now and research later, hope it pays off. At $ 8.08/shr it is stupid cheap and now we have exactly the right business model that works.

How ironic you use the words "stupid cheap".

I hope not for the sake many!

[cjmartin]

Alright . . . long time lurker, first time poster. My credibility to be part of this thread is that I have accumulated a few thousand shares between January and June 27th, obviously being bitten by the June 28th disaster that hit a lot of us. I am a long time lover of BlackBerry, actually worked for them during school before moving to the Bay Area. I think what motivated me to finally join this thread is how deep this blow was . . . June hurt, but this time, I was ready. I had a sell order in place for next Wednesday (assuming BBM and acquisition news wasn't substantial), and I was going to sell at least half, if not my whole position, and average down as the earnings was expected to be a disaster. Then they had to go ahead and announce this news 1 week before earnings. I have never seen an earnings adjustment/warning only 1 week before ER before . . . normally they are mid-quarter, because that is when the company realizes things are not going as expected, and are legally required to disclose that it will be a bad quarter. There is no excuse for BlackBerry to wait until 1 week before ER to release how drastically they missed guidance.

Anyway, the point of my post is this. The optimist in me says . . . a deal must be in the works, they forced x-BBM, z30 and this earnings warning all within a 3 day window. Why would they do this, unless there was a deal in the works?

Playing the devils advocate (as we all have to do, if we are realistic), maybe BlackBerry received no reasonable offers and decided the only way to move forward as a company was to bite the bullet this quarter, and slim down the company to move toward profitability. This is a very reasonable approach . . . when you are out of options, cut the fat, focus the business and try to move forward.

Then I began to think about this more, and the devils advocate approach doesn't seem to make any sense to me. If the purpose is to not sell or make a deal . . . then why the urgency? Why not wait until the ER to unleash all this bad news? This makes me think that there is a VERY serious deal on the table. Though an acquisition deal, definitely not a joint venture or partnership. I feel there must be an acquisition on the table, but the acquiring company did not want the write down or the employees on their books, before signing the deal.

Either this, or management is just as idiotic as they seem for releasing this info on iPhone launch day, and the day before x-BBM launch.

I would love to hear what some of the experts of this thread think of my "theory"

[rebekahlynnharrison]

Well guys, you can't get rid of me lol, I still have half my shares in BB.
I just left the half in an area where I have more time let it come back to life as it were.
The half I sold remains in my short term growth and quite frankly, bb really doesn't fit
well into that slot ATM, coupled with the notion there may be more downside to come.
Twas a crappy day to say the least and I just have zero trust in T.H. right now.

[Superfly_FR]

Mid Saturday, only a few in the boxes.
Some OT sometimes heal .

Cheers all !

No kidding that's my Q10 boss !

[Gesig Boek]

Anyway, the point of my post is this. The optimist in me says . . . a deal must be in the works, they forced x-BBM, z30 and this earnings warning all within a 3 day window. Why would they do this, unless there was a deal in the works?

Playing the devils advocate (as we all have to do, if we are realistic), maybe BlackBerry received no reasonable offers and decided the only way to move forward as a company was to bite the bullet this quarter, and slim down the company to move toward profitability. This is a very reasonable approach . . . when you are out of options, cut the fat, focus the business and try to move forward.

Then I began to think about this more, and the devils advocate approach doesn't seem to make any sense to me. If the purpose is to not sell or make a deal . . . then why the urgency? Why not wait until the ER to unleash all this bad news? This makes me think that there is a VERY serious deal on the table. Though an acquisition deal, definitely not a joint venture or partnership. I feel there must be an acquisition on the table, but the acquiring company did not want the write down or the employees on their books, before signing the deal.

I am no expert, but the media rumours from "people with knowledge of the situation" which has always been right so far, claim BB has been trying to shop the company around for a while now, with no bites, and each month the company of course is proven to be less attractive due to lack of market traction.

If a serious deal is coming it will be for less than expected, and may even be a "take-under" due to still unrealized losses due to future looming writedowns. They only wrote down the Z10, but do we seriously think the Q10 and Q5 is doing a lot better, not to mention the already overpriced Z30?

[emtunc]

I'm holding my shares (definitely not as much as some of you guys here and I feel sorry for the ones who are in the hundreds of K in minus... I hope you make it all back) because as far as I can tell, all the bad news is out. Why sell when they've pretty much hit rock bottom for this quarter. We still have a potential buy-out in process, cross platform BBM figures, BES10, a 5 inch Z30 and some other things.

Personally I can't see and I hope I don't see this going down much further but with BBRYs stupid management (my opinion) I wouldn't be surprised if they let out some more bull.

[bungaboy]

Morning BBRY casualties.

Man do I ever feel hurt, used and abused today.

I still hold all my shares.

I hope the "I told ya so" team has had their fill along with the haters.

Going forward from here.

I may just take advantage of any further buying opportunities next week.