[spiller]

BlackBerry finally selling factory unlocked Z10s and Q10s at Shop BlackBerry.com

BlackBerry Unlocked Smartphones - ShopBlackBerry.com

The 1B writedown in inventory. They are still selling these at a marked up priced. Say BB has 1B phones in carrier warehouses that are not sold and thus were not counted as sales. And they have 1B in inventory in their own warehouses. I'd say they have a decent shot of collecting 30%+ of that 2B. That means at most a 200M writedown coming if they now have their supply chain winding down to more appropriate levels.

If they get 50%+ then the buyer gets free cash inflow.

Is this a correct analysis?

[kevxn]

If eventually those writing down phones can be sold at the price of their manufacturing costs, BlackBerry will make 1 billion dollars profit back, which makes the takeover more attractive.

Posted via CB10

[bigbadben10]

Are we really back on track now?? I sure hope so as I as about done with this thread and CB. I really hope it stays this way. Thanks Mods I am very grateful. Cheers Ben

Posted via CB10

[BergerKing]

Are we really back on track now?? I sure hope so as I as about done with this thread and CB. I really hope it stays this way. Thanks Mods I am very grateful. Cheers Ben

Posted via CB10

It can be touch and go. Don't let them get to you, if they do, they 'win', or whatever that means to them.

[kfh227]

Nm
Posted via CB10

[kfh227]

Write downs save on taxes. So more money goes to the owner.

But if that stock in the write down is sold off at a positive margin post write down there would be more profitability and thus higher taxes and less money in the pockets of the owner.

I just hurt my brain reading what I posted. Take it with a grain of salt.

All that matters is free cash flow. Google the effects of write downs on fcf


Posted via CB10

[Komoto]

As I have said before I dont see a massive problem with the business. Sure it has changed,but that is why they call it a transition phase!

The whole talk of privatisarion/selling has not helped.

The hardware has shrunk, so needs downsizing (don't forget it also has a chance to grow again if/when OS catches on).

The write down was unnecessary. They may want to subsidize BES10 contracts with BlackBerry 10 phones, but I am sure they are giving bulk discounts anyway.

Services revs will be transferred over to BES10 gradually.

M2M and cars should come in in the following years.

BBM will have massive growth when launched. New potential revenue streams from here.

20 + is the price I would consider selling. I will be annoyed if the privatisarion goes through.

Posted via CB10

[Superfly_FR]

Write downs save on taxes. So more money goes to the owner.

But if that stock in the write down is sold off at a positive margin post write down there would be more profitability and thus higher taxes and less money in the pockets of the owner.

I just hurt my brain reading what I posted. Take it with a grain of salt.

All that matters is free cash flow. Google the effects of write downs on fcf


Posted via CB10

Taxes will only apply on effective sales: They are collected when customer buys but donated to the tax owner at the end of the period.
Simple example :
Build cost : $100
Sell price w/o taxes : $150
Taxes (20%) : $30
Customer price Tax included: $180

Balance sheet : 150 - 100 = $50 profit
Treasurership : $180 incl $30 taxes collected in advance (due at the end of the collect period: quarter ?).
As BB have negative operating result, they won't pay taxes on earnings .

In fact this would have a positive effect on treasurership (hope it's the proper technical term - I mean it's not equivalent to "cash in hands") until the state/country get paid for it. That's the way it works in France and I believe it's the same in CAN/USA.

[Superfly_FR]

We now have a Twitter account @StockBerrians

Won't be there much today : office move.
Cheers and enjoy your Sunday, gang !

[Ribes Nigrum]

Great! Following the account.

It's a beautiful stock price red Q5! Buy one! Help us go green!

[JonCBK]

There seems to be a lot of speculation about the $1B write down of inventory. Folks seem to be spinning it in a positive manner which I don't think is a good idea. Really I suspect the Z10 sales have slowed to a crawl at least at these prices. It is nice that BBRY is selling these phones directly, but the price for them is ridiculously off market. iPhone 5S is getting sold at huge volume and that is resulting in a trickle down effect of used iPhone 4, 4S and 5 getting released to the used market. The Z10 needs to get priced below a used iPhone 4S or it isn't going to sell.

The good thing about the Z10 is that it is a pretty good phone. If they can get it in folks hands (especially techy folks who run around with multiple devices) we can get the word out a little bit better about BB10. Folks think BBRY devices are terrible. A guy at my office said something like, "The carriers will leave BBRY in their stores because they can then show them as being terrible and it will make the cheap Android devices look better." That is the impression that folks have. They don't realize that the new OS stacks up easily against Android devices. And the build quality of the phone is great. Another office assistant rocks two devices (Work and Play). The Work being the Q10, which she doesn't like much but partly because she doesn't really get how to do the gestures. (But that said, she also doesn't like iOS7 on her iPhone 5, so maybe she is just a negative person as far as new technology goes.) If there were more folks out there with BB10 devices someone would have eventually shown her how to use hers.

Anyway, those Z10s have to get out into customers hands before their technology becomes too outdated. I don't see that happening if BBRY is still going to price the device over $400.

[cgk]

Anyway, those Z10s have to get out into customers hands before their technology becomes too outdated. I don't see that happening if BBRY is still going to price the device over $400.

It sort of already is in that carriers are EOLing it, so while the technology might be relatively good, the perception is that it's an old phone - it's hard to bring such a thing back to life unless you have a serious discount on it.

[danprown]

Very interesting story. What I take away from it is that Mike L. made a series of disasterous calls that ran his baby into the ground. What surprised me is that TH actually butted heads with Mike L and prevailed. Between Jim Mike and TH, it reminded me of this story:

The Swan, the Pike, and the Crab

Whenever companions don't agree,
They work without accord
And naught but trouble doth result,
Although they all work hard.

One day a swan, a pike, a crab,
Resolved a load to haul;
All three were harnessed to the cart,
And pulled together all.

But though they pulled with all their might,
The cart-load on the bank stuck tight.

The swan pulled upward to the skies
The crab did backward crawl,
The pike made for the water straight
It proved no use at all!

Now, which of them was most to blame
This not for me to say,
But this I know: the load is there
Unto this very day.

What did people make of the G&M story? Some interesting insights

Sent from my XT890 using Tapatalk 4

[morganplus8]

Thought I would post another chart as silly as it seems, when a stock gets so far below its target price of $ 9.00 sometimes TA is at work again:



We seem to be oversold in the short-term again with the RSI below 30 and we are also basing out at $ 8.00/shr here. The additional factor is the 3-ema which points to short term momentum, we are ever so close to breaking above that average resulting in a rally from here. If you just woke up from a coma and didn't know that BBRY has a weak "tentative" offer (yeah, right it's weak) for it at $ 9.00/shr you would be looking to buy it down here. Why? Because the Technicals tell you it is ready for a pop. In addition, after 5-days of staying outside the Bollinger Bands, we are now back inside of them and oversold as well.

Now the fun begins, with all of the posts on this thread rationalizing that "BBRY couldn't be worth more than $ 9.00/shr today", and that "there is no way an offer could come in because we have analyzed the value of the company based upon the latest Q report and they are lucky if they can survive" ............... what a load of nonsense. They downsided the company and reduced overhead. Unless total sales of handsets drop below $ < 800 miliion, they are now no longer burning cash, they are now able to sell free phones on their books for $ 280/unit which is cost (direct to BES10.1 enterprise), and well below the $ 450 they have been trying to get, and they have BES10.1 at the very beginning of growth. Now that they aren't marketing for the masses, costs will be dropping off in a big way. Heins could come out stating that they will be profitable going foward with these changes alone, but no one believes him any more so that only a modest plus. But this isn't what potential buyers look for. They look at the company less cash, it is cheap if it can carry itself. Prem knows this and is confident that the company itself is so strong now that he doesn't have to spend a dime to purchase it. As many see the Prem's offer as weak or negative, others are actually looking to invest in it based upon it's fundamentals. That tells you that a debt financing is likely successful and bodes well for BBRY. So to think that no one looking at the company, with its internal strengths ............ is silly.

We went through 5-days of the "weak bid" process while waiting for a nugget of additional information on the Q2, we were left with slightly better results and no apparent reason to think that Prem would change his mind. Prem has offered two plans, the first one is to receive complete financing from others with an eventual ownership of 30% of the company himself without placing an additional dime into the package. The second deal is to use some bridge loans and pledge BBRY's cash, using the cash to pay down the bridge loan and finance cashflow later. His deal is real, it isn't weak and it will happen barring another offer.

The other silly idea is that Prem controls the deal, he can stop anyone from buying the company because he owns 10% of it, not true, there would have to be a vote on any new offers that come along. The suggestioin is that Prem can buy it cheap and others will stand aside and do deals with him in private for the pieces. At $ 9.00 (really a purchase at $ 4.00/shr) anyone interested in the business will just buy it out from under him. So the true test of the value of BBRY will occur in the weeks ahead. It isn't over by any stretch and the company is wide open to all who want to bid on it.

[peter9477]

The other silly idea is that Prem controls the deal, he can stop anyone from buying the company because he owns 10% of it, not true, there would have to be a vote on any new offers that come along.

Relevant to this is that Fairfax is constrained to vote in favour of any board-approved "superior offer". FFH may hold the 10% needed to veto a better offer, but they've basically agreed not to.

[Shanerredflag]

Relevant to this is that Fairfax is constrained to vote in favour of any board-approved "superior offer". FFH may hold the 10% needed to veto a better offer, but they've basically agreed not to.

And there is Mikes 5%....thats a significant voting block...interesting times indeed.



Posted via CB10

[morganplus8]

There seems to be a lot of speculation about the $1B write down of inventory. Folks seem to be spinning it in a positive manner which I don't think is a good idea. Really I suspect the Z10 sales have slowed to a crawl at least at these prices. It is nice that BBRY is selling these phones directly, but the price for them is ridiculously off market.

Anyway, those Z10s have to get out into customers hands before their technology becomes too outdated. I don't see that happening if BBRY is still going to price the device over $400.

JonCBK,

I think many have good reason to think that the $ 1 billion writedown is a good thing for BBRY or suitors of BBRY. You are right, the current price for Z10's is too high but that's because it is a 9 month old phone and we now have Q10. Q5 and Z30 at the moment. All BB 10 phones are great with BB 10.2 on them, we only have the Z30 with this awesome OS today. In October, we will see the roll out of BB 10.2 and that will make these phones even better. But what is great about the Z10, is the price, they are now just beginning to sell BES10.1 to Enterprise and direct sell Z10s and Q10 to them as well. They have cut out their middlemen and can sell these phones in large quantities to Enterprise at a price between zero and $ 450.00. That is a welcome sign and that $ 450 is/was the full retail price to carriers so that is a hugely profitable range for them. On top of that, they are selling these phones for a profit thanks to the writedown and only have to beat Q2 at $ 800 million in revenue. The bar is so low and the direct sales price is so high without all of the overhead, they could kill in Q3. To continue the math, suppose they sell 2.2 million BB 10's at a $ 350 average, and at no cost to them, that money is all high margin stuff. They did sell 5.9 million phones in Q2 and counted only 3.7 million of them because the 2.2 million BB 10 phones were shipped to carriers but unsold in Q1. Still, they sold them and some BB 10's shipped in Q2 that we weren't allowed to know the breakout of. It is clear that they continue to sell BB 07s because they attract subs and revenue, in addition, they pay some of the bills of running BB. So to conclude, they have right-sized the company, the number of BB 10's needed to produce some positive revenue is now reasonable and sales haven't tanked so much as they are restated. Now that BES10.1 is starting to kick in, along with the launch of the Z30 and BB 10.2, and less we forget, the BBM-X nonsense, seeing just 2.2 million BB10's sold in Q3 should be easy, not to mention the benefits of selling at least 3.3 million BB 07s (projected and likely).

The company could launch BBM-X, BB 10.2 and sell to Enterprise directly and make plenty of money in Q3, then simply turn down Prem's offer. Finally, analysts haven't raised their targets on BlackBerry for nothing, the most bearish of all analysts went from $ 5.00 to $ 9.00 because they can see that BB is right-sided to be profitable again. They won't be burning cash and can work with their BES10.1 customers to sell phones directly and thus cut out the middlemen.

What I find funny is the comments made by Misek, you know the guy who had a target for BBRY of $ 22.00/shr in the final week of June/2013, and now has a target price of just $ 5.00/shr, two months later, while telling us all along that BB should dump hardware and run on software and security alone. He gets what he wishes for and drops his target to $ 5.00/shr. You might just want to sue some analysts wouldn't you? LOL

[Komoto]

Morgan, we obviously agree on a lot of issues.

my problem is this. Why load all the bad news in Q2 if they wanted to find a buyer, why not spread it, or push it all to next quarter.

This in my mind confirms the fact that the deal is done and this helps to keep other offers away for Prem.

Posted via CB10

[notfanboy]

What I find funny is the comments made by Misek, you know the guy who had a target for BBRY of $ 22.00/shr in the final week of June/2013, and now has a target price of just $ 5.00/shr, two months later, while telling us all along that BB should dump hardware and run on software and security alone. He gets what he wishes for and drops his target to $ 5.00/shr. You might just want to sue some analysts wouldn't you? LOL

^^^ This!! ^^^

I completely agree that analysts should be held accountable to their predictions. Not to the extent of suing them, but analysts' track records and previous predictions should always be fair game for review.

[sparkaction]

M+8

I am not sure cutting out the middleman is such a great idea because I think there is a lot of dealers making a lot of money from enterprise customers. These dealers spend lots of money doing whatever it takes to get and maintain these accounts. Profit motivated.


I'm thinking that if a CIO has a choice between ordering directly from BlackBerry or something else offered by these face-to-face dealers then the constant pressure (and potential gifts and business lunches) may sway the CIO to purchase from the dealer which I assume will be pushing IOS and Droid.


What do you think?

[bungaboy]

Morgan, we obviously agree on a lot of issues.

my problem is this. Why load all the bad news in Q2 if they wanted to find a buyer, why not spread it, or push it all to next quarter.

This in my mind confirms the fact that the deal is done and this helps to keep other offers away for Prem.

Posted via CB10

The hair standing up on the back of my neck tells me they aren't really for sale!

I am wondering if all this was done to hit the "re-set switch". To clean house, re-size and start afresh.

Time will tell.

[sparkaction]

The hair standing up on the back of my neck tells me they aren't really for sale!

I am wondering if all this was done to hit the "re-set switch". To clean house, re-size and start afresh.

Time will tell.

Do you also think there needs to be a change in management?

[Shanerredflag]

The hair standing up on the back of my neck tells me they aren't really for sale!

I am wondering if all this was done to hit the "re-set switch". To clean house, re-size and start afresh.

Time will tell.

Lol...I'm treating it as a buying oportunity...what the heck... an almost sure 12% gain...maybe allot more. Pretty certain the lower price since the announcement from Prem was just shorts exiting their position. Will see soon

Posted via CB10

[morganplus8]

Morgan, we obviously agree on a lot of issues.

my problem is this. Why load all the bad news in Q2 if they wanted to find a buyer, why not spread it, or push it all to next quarter.

This in my mind confirms the fact that the deal is done and this helps to keep other offers away for Prem.

Posted via CB10

Komoto!!

Yes, we do agree on many things here, but like you, I first thought that the company should have held back on the adjustments for one more quarter, the fact is, they couldn't as their current method of recognizing revenue was not working. They were digging a bigger hole every month that they continued to report hardware this way. So then I looked at it as a way to clear the balance sheet and setup the company for sale. That felt better but I wasn't too comfortable with that either, having had a few days away from all of this and having read many of the posts that aren't "blocked" by me on this thread, the media, and Chris on CB, have been bashing the company for all the wrong reasons. Chris hates it because he doesn't understand the mechanics behind the restating of inventory, he lost a pile of money and can't get his head out of that mess, and the media are there to gain clicks. So what could the company be trying to do?

I think they talked to Prem after pre-announcing Q2, knew he had an offer ready at a higher level and struck a deal with him to make a lower offer NOW. This is how he managed to get the favourible terms of the agreement. Part of the agreement was to expose himself to other offers and for that, he is paid a modest walk-away fee as he could/would very likely lose money if another bid comes in. So he is satisfied that he will be getting out of all of this, or, he will take the company private. If an offer came in at $ 12.00/shr, Prem gets a token payment for his troubles, he takes a loss on the whole investment though, and there is no chance that he will make a counter affer at some higher level, or, what that higher offer that he was going to make in the first place is, we just don't know. So the company is up for sale, the books are clean, business is as usual and he can at least know he did his part.

The company now needs to launch BBM-X ASAP and get BB 10.2 out as well. They need to present themselves the best way they can and they have a month to accomplish this. I think they will. I also think the stock price is where it would be if Prem hadn't made an offer, I don't see it dropping more here. The arbs have knocked it down to cover shorts knowing that nothing is going to happen to the company or the price of its shares until the full .pdf statement comes out from the company later this week. So far, I haven't read one analysis of the pre-announcement that covers what actually happened to the inventory. Chris needs to take another look at it and stop telling us about "annualized quarterly burn rates" for cash when even those with no knowledge of accounting know they took one time charges and downsized so as not to produce those quarterly losses again. He is so bitter and I don't blame him but this site isn't the place to take out his losses or hatred of management.

[Komoto]

No, I think it would be a bad move.

Any new management will change the entire plan. This would jeopardize what they have done to date.

This plan was hatched with a lot of thought, it should be let to run.

My opinion obviously.

Posted via CB10