[smithm565]

BlackBerry v. FB & Snap lawsuit update:

Case# 2:18-cv-01844 - FB
Case# 2:18-cv-02693 - Snap

2/28/19 -
- Snap files Opening Claim Construction brief. 40 pages.
- FB files Opening Claim Construction brief. 47 pages.
- BlackBerry files Opening Claim Construction brief. 47 pages.

3/18/19 - Snap, FB, BB all file Responsive Claim Construction Briefs

3/21/19 - Snap Tutorial and Claim Construction Presentation & exhibit filings. Minutes from tutorial filed. Judge said party is to return for Markman Hearing on 4/1/19. Also, snap is to be added as a defendant in the BB v FB case# 1844.

3/25/19 - BB filed a motion to strike declaration of Facebook expert Johnathan Katz. Motion set for hearing on 4/1/19.

3/26/19 - joint statement regarding disputed claim terms filed by BB.

3/27/19 - Judge Wu issues order asking for clarification on 3 remaining disputed claim terms, as well as positions on motion to strike from 3/25. These are due 3/28/19.

3/28/19. BlackBerry added attorney Pushkal Mishra.

3/28/19 - Joint statement filed by BlackBerry Re: judge's order from 3/27.
______________________
BIG DAY TOMORROW. Start of Markman Hearings.


Posted via CB10

[Corbu]

Many thanks for your updates, smithm565!

BlackBerry v. FB & Snap lawsuit update:

[...]

3/27/19 - Judge Wu issues order asking for clarification on 3 remaining disputed claim terms, as well as positions on motion to strike from 3/25. These are due 3/28/19.

3/28/19. BlackBerry added attorney Pushkal Mishra.

"Pushkal Mishra is an associate in Quinn Emanuel’s Los Angeles office. He joined the firm in 2018 after serving as a judicial law clerk to the Honorable Todd M. Hughes, of the U.S. Court of Appeals for the Federal Circuit, and to the Honorable George H. Wu, of the U.S. District Court for the Central District of California."

[Corbu]

Morgan Stanley

James E Faucette

April 1, 2019 04:01 AM GMT

BlackBerry Ltd | North America

Road More Clear as IP Keeps the Wheel

Stock Rating: Equal-weight
Industry View: Cautious
Price Target: $10.00

Another top line beat on IP licensing drives better GM and EPS. Upbeat FY '20 color, but Cylance disappoints our original expectations (pushing down our estimates slightly) and we would like to see more traction outside of IP licensing. We remain EW.

Upbeat tone on outlook and increased clarity help drive stock toward our PT. BlackBerry's FQ4 '19 earnings results were delivered with an upbeat tone on growth for the business, but the primary upside driver to estimates remains IP licensing, which reported revenues of $99mm, 24% above our $80mm expectation. BlackBerry has been able to consistently deliver upside to expectations on IP licensing growth. A strong pipeline of one-time settlements is expected to continue through FY '20, on top of a recurring revenue base of ~$40-45mm, and while we are hesitant to view revenue upside in IP licensing more positively, we think the segment is becoming a more reliable source of revenue. Enterprise Software and Services (ESS) came in below our initial expectation, but was facing tougher comps due to ASC 606 accounting changes, an impact that will be mitigated in future quarters. BTS came in at our expectation, continuing marginal q/q growth as the company looks for long-term opportunity in autos and IoT management. Outlook on Cylance disappoints our initial expectations and is expected to be dilutive to EPS FY ’20. BlackBerry has reorganized its business under three areas: IoT, Cylance, and IP Licensing. Despite high growth expectations across these three business areas, we remain EW without evidence of ability to exceed expectations outside of IP licensing.

Gross margins beat on business mix, but operating expenses increase with acquisition. Gross margins in the quarter of 82% exceeded our expectations of 76% as IP licensing revenues accounted for 39% of total revenue in the quarter (above our estimate of 32% and above 30% contribution in the prior quarter). Operating expenses increased after decreasing for three consecutive quarters due to the acquisition of Cylance and are expected to remain at elevated levels moving forward. We are increasing our FY ’20 opex estimates and reducing gross margins to account for increased clarity on Cylance, which is expected to add ~$300mm in expenses in FY '20, with $220mm in opex ($50-60mm/qtr, above our original estimate of $44mm/qtr where we assumed 5-10% operating margins) and lower gross margins due to a greater proportion of professional services in the business model. EPS of $0.11 was above our expected $0.06 driven by better top line and gross margins.

Revenue contribution from Cylance disappoints our expectations. BlackBerry disclosed Cylance revenues of $170mm for the fiscal year ended Feb '19, below our initial estimates of ~$198mm, which we projected based on the implied Growth from the multiple paid in the transaction. Our new estimate for Cylance revenue contribution in FY '20 is ~$217mm, down from our initial estimate of $252mm. We were optimistic on growth for Cylance, anticipating a ~50% growth rate given the price paid and the fact that the company had previously seen 90% growth YoY, but we were disappointed to find that a large portion of this growth was driven by one-time events and meaningfully slower revenue growth is expected moving forward.

Lowering our estimates. Our new FQ1/FY20 revenue / EPS are $268.8mm / $0.00 and $1,147.1mm / $0.05 from $276.4mm / $0.05 and $1,165.7mm / $0.22 respectively. Although our increased IP licensing estimates now meet BlackBerry's stated goal of $270mm in FY '20 (up from our estimate of $240mm previously), increased IP licensing revenue is offset by lower revenue estimates for Cylance and the ESS. Our operating expenses increase to adjust for dilution from Cylance, which is not expected to be accretive until its second fiscal year under BlackBerry ownership (FY ’21). Our EPS estimates are negatively impacted by dilution from the acquisition.

Remain EW with a $10 PT. Our $10 PT is ~5x FY21 revenue estimate, in-line with coverage universe on a growth-adjusted basis (treating Cylance as inorganic for now). Our multiple embeds some conservatism given more limited optionality resulting from the size of Cylance acquisition. We think appreciation beyond our PT will depend on acceleration in the IoT business areas, but gradual trajectory and modest growth lead us to believe multiple re-rating will be difficult. We could turn more positive on the stock with improved growth in Enterprise Software, Cylance, or BTS, and we could turn more cautious if estimates remain optimistic despite limited software acceleration.

[smithm565]

[PDF]IP Litigation in United States - Stanford Law School
https://law.stanford.edu/wp-content/...esentation.pdf

Very good details & results from past patent litigation in the US, although a little dated (2008-2016 case data).

Highlights:

- Jury & Bench trials are rare in IP litigation
- Cases take about 2.4 years to reach trial
- Damage Awards are rare & 76% of cases result in a voluntary settlement
- Jury trials tend to favor patent holders

Patent Litigation Phases:
I = Start to CMC (case Mgmt conf)
II = CMC to Claim Construction (Markman)
III = Claim Construction to end of expert discovery.
IV = Pre-trial to trial.

- Phase I-II: 50% of cases settle in first 8-11 months of litigation
- Phase I-II: 90% of cases settle before claim construction.
- Phase I-III: 95-97% of cases settle before trial.
- Less than 10% chance of case continuing to Phase III and IV.

- Purpose of patent: "The right to exclude" others from making, using, or selling Invention.
- Purpose of claim construction (Markman): Identify Boundaries of Private Property.

- Markman hearing is one of the most important events in any patent case.
- Cases that proceed to Markman usually involve a substantial dispute between parties regarding the value of case.
- Claim Construction decisions are very labor-intensive for the judge and often reversed by the federal circuit.
- Claim hearing terms - Plaintiffs seek to limit # of terms, Defendants seek to have numerous terms, court usually caps at 10-15 terms.

- Phase III is very expensive to litigate
- Most courts in the US require parties to participate in a management settlement conference or mediation, which typically occurs in Phase III, and courts require parties to send reps "with decision making authority". Courts cannot force settlement

- During Phase IV - in-house counsel needs to develop contingency and communication plans - win/lose.

Posted via CB10

[rampagingpanda]

[PDF]IP Litigation in United States - Stanford Law School
https://law.stanford.edu/wp-content/...esentation.pdf

Very good details & results from patent litigation is the US, although it is a little dated (2008-2016 case data).

Highlights:

- Jury & Bench trials are rare in IP litigation
- Cases take about 2.4 years to reach trial
- Damage Awards are rare & 76% of cases result in a voluntary settlement
- Jury trials tend to favor patent holders

Patent Litigation Phases:
I = Start to CMC (case Mgmt conf)
II = CMC to Claim Construction (Markman)
III = Claim Construction to end of expert discovery.
IV = Pre-trial to trial.

- Phase I-II: 50% of cases settle in first 8-11 months of litigation
- Phase I-II: 90% of cases settle before claim construction.
- Phase I-III: 95-97% of cases settle before trial.
- Less than 10% chance of case continuing to Phase III and IV.

- Purpose of patent: "The right to exclude" others from making, using, or selling Invention.
- Purpose of claim construction (Markman): Identify Boundaries of Private Property.

- Markman hearing is one of the most important events in any patent case.
- Cases that proceed to Markman usually involve a substantial dispute between parties regarding the value of case.
- Claim Construction decisions are very labor-intensive for the judge and often reversed by the federal circuit.
- Claim hearing terms - Plaintiffs seek to limit # of terms, Defendants seek to have numerous terms, court usually caps at 10-15 terms.

- Phase III is very expensive to litigate
- Most courts in the US require parties to participate in a management settlement conference or mediation, which typically occurs in Phase III, and courts require parties to send reps "with decision making authority". Courts cannot force settlement

- During Phase IV - in-house counsel needs to develop contingency and communication plans - win/lose.

Posted via CB10

Very informative, thank you smithm565

[Munchkinguy]

I bought a bunch of BlackBerry stock in 2015, expecting that their pivot to software would lead to better returns. Since then, their stock seems to rise every time they have a big announcement, but then sink back down. At this point I'm not experiencing any long-term capital gains. Do you think it's worth holding, or should I just sell the next time there is a big announcement?

[Corbu]

Had not posted this.

JC with Amber:
https://www.bnnbloomberg.ca/video/bl...nities~1648681

Blackberry CEO: Transportation, healthcare are our next growth opportunities
Blackberry shares rose after the Canadian tech company reported strong Q4 results. John Chen, CEO of Blackberry, discusses growth drivers for the business.

Plus some comments of the SP.

[Corbu]

Good point by Amber at around 1 minute.

https://www.bnnbloomberg.ca/video/bl...1-2019~1649672

[EchoTango]

I bought a bunch of BlackBerry stock in 2015, expecting that their pivot to software would lead to better returns. Since then, their stock seems to rise every time they have a big announcement, but then sink back down. At this point I'm not experiencing any long-term capital gains. Do you think it's worth holding, or should I just sell the next time there is a big announcement?

My only comment is "join the rest of us in hopeful anticipation".

Speaking for myself, I have held the stock since is was in the mid 60's (CDN) and have bought and sold on the waves you describe to increase the holdings and average down the per-share cost. I'm sure I'm not the only one. The current $9-$15 range has been a reality for the past couple of years and a breakout is alway anticipated but has not yet materialized. We all have hoped the next quarter will the ONE to make this happen and we starting trading in the 20's and 30's toward some individual goal which yields a reasonable profit.

So to hold or sell is really up to the individual and their personal investment goals. However, in my view, this is not a stock that will satisfy the short-term investor.

[Chuck Finley69]

My only comment is "join the rest of us in hopeful anticipation".

Speaking for myself, I have held the stock since is was in the mid 60's (CDN) and have bought and sold on the waves you describe to increase the holdings and average down the per-share cost. I'm sure I'm not the only one. The current $9-$15 range has been a reality for the past couple of years and a breakout is alway anticipated but has not yet materialized. We all have hoped the next quarter will the ONE to make this happen and we starting trading in the 20's and 30's toward some individual goal which yields a reasonable profit.

So to hold or sell is really up to the individual and their personal investment goals. However, in my view, this is not a stock that will satisfy the short-term investor.

Well said.

[morganplus8]

I bought a bunch of BlackBerry stock in 2015, expecting that their pivot to software would lead to better returns. Since then, their stock seems to rise every time they have a big announcement, but then sink back down. At this point I'm not experiencing any long-term capital gains. Do you think it's worth holding, or should I just sell the next time there is a big announcement?

Over the past 4 years, this thread has preached caution in terms of the price of the stock itself. We generally say that if the stock is overbought, you can sell it outright, write some covered calls against it but definitely do not buy it at those levels. We often give the reverse advice when it is over sold.

What we mean by overbought is price of the stock getting ahead of its prospects in the short-term. We use technical indicators like RSI & Bollinger Bands as an example of just two indicators to give you that kind of insight. On Friday, the RSI level (over 70) pointed to an overbought scenario along with the Bollinger Bands confirming this as the price of the stock was WAY outside those Bands.

We purchase using the same indicators as above looking for an RSI<30 & the stock price bumping up against the lower Band. So there you go, time has taught many of us not to take "big" news so literally. We can make money while waiting for John Chen to turn BlackBerry around and establish a growth pattern in their financials.

Buying/selling is a personal thing, you either want to risk missing out re: superior gains or you are content to lock in profits every now and then. At any given time, there is someone always looking at this thread who can update you on where we stand with the best buy/sell levels.

In closing, the stock was grossly overbought on Friday, today, we have corrected that issue with the stock well below RSI=70 & its now trading well inside the Bands once again. It is bullish and very near closing the gap up made on Friday as well. Now is not the time to buy or sell until it settles out. The trend is clearly bullish though.

Hope this answers your question. Good luck.

[smithm565]

Some brokerage comments today on BB:

- MKM Partners raised price target from $8.50 to $11

- TD Securities maintains buy rating, raised price target from $14 to $14.50.

- Raymond James maintains Market Perform rating, maintains $11 price target

Posted via CB10

[Corbu]

BlackBerry (BB) Stock Is Still Not a Buy, Says Canaccord

Canaccord analyst Michael Walkley remains cautious on BB stock with a Hold rating, but raises his price target to $10.00 (from $9.00), which implies a slight upside from current levels.

Licensing revenue was key to BlackBerry’s strong results. Walkley says, “similar to Q3/F’19, strong licensing revenue once again drove the beat for the quarter, continuing to demonstrate the breadth of the BlackBerry portfolio,” as non-GAAP revenue hit $99 million, above the analyst’s expected $85 million. Moving forward, Walkley believes “strong execution in monetizing the patent portfolio will continue to drive licensing revenue exceeding the quarterly $40M-$45M recurring revenue run-rate, and...anticipate[s] $58M Q1/F’20 licensing revenue.”

Walkley is impressed with BlackBerry’s licensing business, as the company maintains a number of essential and non-essential technology patents. The analyst believes BlackBerry has “successfully built a technology licensing business that management believes is sustainable above $250M annually.” Moving forward, Walkley says he continues to “anticipate potential for improving predictability and solid longer-term growth given the improving base of quarterly recurring revenue.”

Looking ahead, the analyst is increasing his FY2020 and FY2021 estimates, with “total revenue increasing from $1,137/$1,253M to $1,140M/$1,284M.” Walkley says “F2021 revenue increases for ESS from $460M to $462M, for BTS from $266M to $269M, for Licensing from $285M to $287M, and for Cylance from $242M to $263M.” However, even with higher revenue Walkley is lowering his gross margin estimates for both years, though only slightly from 76.6%/77.6% to 75.7%/76.9%. Nevertheless, the analyst anticipates “margin expansion as operating leverage improves through 2020 and beyond.”

[Corbu]

More background on those analysts' guidance:

What Analysts Think Of BlackBerry's Turnaround

[Corbu]

What bothers me is I don't see any big positive game changer anytime soon.

Must we resign ourselves to another 24 months of $9-$11 SP?

JC claims BB has transformed itself. Clearly, the market is not convinced.

[bbjdog]

Sad day in history!!!!

[drobbie]

What bothers me is I don't see any big positive game changer anytime soon.

Must we resign ourselves to another 24 months of $9-$11 SP?

JC claims BB has transformed itself. Clearly, the market is not convinced.

The pattern continues. This is a trading stock. Buy and sell on news

[Munchkinguy]

My only comment is "join the rest of us in hopeful anticipation".

Speaking for myself, I have held the stock since is was in the mid 60's (CDN) and have bought and sold on the waves you describe to increase the holdings and average down the per-share cost. I'm sure I'm not the only one. The current $9-$15 range has been a reality for the past couple of years and a breakout is alway anticipated but has not yet materialized. We all have hoped the next quarter will the ONE to make this happen and we starting trading in the 20's and 30's toward some individual goal which yields a reasonable profit.

So to hold or sell is really up to the individual and their personal investment goals. However, in my view, this is not a stock that will satisfy the short-term investor.

I'm more of a buy-and-hold type of person, but given that I've been holding for four years without any lasting appreciation in value I'm thinking that I could have invested in any stock with a 3% yield and done better. Thinking about cutting my losses at this point.

[Corbu]

The pattern continues. This is a trading stock. Buy and sell on news

Indeed.

The question remains: will it ever be anything else, realistically?

[bbjdog]

Indeed.

The question remains: will it ever be anything else, realistically?

Remember your thoughts have been shared mate!!! cheers!!!!

[bbjdog]

whats the difference between John Chen and this Thread??

Balls!!!!!!!!!!

[curves2000]

Wouldn't the fact that they are modeling a 23-27% growth in revenue help drive the stock? For the longest time we were looking at a never ending period of revenue decline but with other financial metrics such as gross margin and re-occcuring revenue going up.

I don't think this will be a blockbuster year but I can see where we are going to be seeing a distinct change in the revenue and growth of the stock.

Hopefully the product development and sales staff can continue to work well together and drive some additional business.

I am frustrated waiting this long and I am eagerly waiting on the stock price to grow, been since 2011 I've held this company.



Posted via CB10

[morganplus8]

What bothers me is I don't see any big positive game changer anytime soon.

Must we resign ourselves to another 24 months of $9-$11 SP?

JC claims BB has transformed itself. Clearly, the market is not convinced.

I have to respond to your comments above. I'm not going to try and sell you a bill of goods for a singular investment that isn't performing like the top 100 out there today. So don't worry about that and give me a chance here!

BlackBerry has one positive thing going for it; it isn't disappearing anytime soon. Sure, there are 1,000's of other stocks with that profile, but, thanks to "you", we know a great deal more about BB then all of the others. So let's choose BB as our investment on the premise that it will still be around for the next few years.

I would suggest that the one positive in owning such a high beta stock are the option premiums that it generates time and time again. You can earn 40% ROI on BB year in and out. By writing covered calls against your holdings, you can compound that 30 - 40% each year and make serious returns. So why don't we all do this now? There is a learning curve that goes with option writing and not everyone is prepared to take the time to understand the process.

You need to know that over 90% of option buyers lose on their investment due to time premium decay. This tells you that you should be the one selling/writing calls and not be the buyer of the same. If you sell calls against your holdings 6 times per year (every 2 months), at say $ .60/each, you have $ 3.00 in cash to buy even more stock down the road. On a $ 10 stock that's a 30% rate of return and you are compounding it. This stock moves enough to generate that much easily. I would suggest 40% straight is achievable annually.

When option writers talk about their writing programs, they state the gains in terms of annualized returns. Someone like W Hoa who preaches TA and determines when the stock is overbought/sold will make even better returns. So there is a way to make a ton of money holding onto BB if you are willing to give up the right to others to control your initial investment. Remember, well over 90% of buyers of options lose their money so you are the one with less then a 10% chance of even losing your stock utilizing this program.

The best part of an option call writing strategy is that you set and forget it. You buy the stock time the option write, complete the transaction and go golfing for 2 months. Come back and do it again etc.. The good news is that you get the cash up front, this means you are compounding this investment from the day you write the first call option. Anyone can do this and I'm sure it will take the pressure off you trying to turn BB into a stellar investment that you can tell that girlfriend of yours about and be proud.

I know this is long winded but hopefully you can see that an option writing program can make you plenty of returns even on a frustrating play like BlackBerry.

[EchoTango]

Indeed.

The question remains: will it ever be anything else, realistically?

My view is that BB has been (re)building a whole new software company that we the long suffering investors have paid for.

My opinion is I'm not going the throw in the towel just when this investment will start to make some impact on revenues. I would prefer the company consolidate the current company capabilities to drive more business than acquiring more start-ups to remain current with the flavor-of-the-month technologies. I think Cylance had the allure of imbedded AI which enabled BB to have a "me too" moment with the current industry buzz trend.

I don't care if it has hamsters in wheels driving it as long as it can generate revenue. This might sound to some rather demanding, but I think I've earned that right given the length of time I've held this stock.

[app_Developer]

At USD 9.59 as I write this, this feels like a sensible investment. The company has come a very long way since this thread started. They are out of the phone business effectively. They aren't dependent on steadily declining NOC revenue. They have solid businesses now that they can grow. They aren't going head to head with giant companies like Samsung or Apple anymore.

They are starting to weave together a decent story about how the products fit together, although I still think that needs more work. Overall, though, this feels like a decent place to put some money to work IMO. I'm not expecting $20 any time soon, but I could see this grow into mid-teens if they continue to execute.