10-02-13 12:09 PM
27 12
tools
  1. fin2007's Avatar
    just did a quick analysis:

    1. book value dropped to 16.22 per share, a $1.8 drop from previous Q, the $16.22 book value still includes a 941M inventories, not sure if it is already writedown, if not, then the book value would drop to ~$14.6. Even $14.6 is still way higher than the $9 bid price

    2. Service revenue is $724M, comparing to $794 last qtr, a 10% drop. Even it drops about 10% quarter by quarter, it can still collect about 5B revenue in the next 3 years, considering the margin, a 1B price tag is not high.

    3, BES software/other revenue is 63M, comparing to 60M in Q1(a increae of 5% considering all the bad news in this Q). Let's assume one year revenue is ~250M, I would put it a value at 500M ~ 1B.

    4. The book value is tricky here,
    Property, plant and equipment, net 2,119
    Intangible assets, net 3,505
    to be conservative, let's assume property to 1B and asset to 1.5B, a drop of 3B, then the book value drop to $9-$10 even writedown the current inventory to 0 again

    5. Cash flow used in operations in the second quarter was approximately $136 million. Uses of cash included intangible asset additions of approximately $268 million and capital expenditures of approximately $112 million, the real cash burn this quarter is actually $136M, should I say that?


    I still do not get it how th company just worth $9?

    Service and security work worth at least 1-2B here
    BES software worth at least 0.5B here( a price/revenue tag of 2 is unthinkable for a software company, I could not find one), if I put a price tag of 1B, it is still below typical software company's price/revenue.

    The software/Service would easily add $5 on top of the book value.

    That is like $20 per share at this point, even in the worst case, a fair value would be at least $15.
    Last edited by fin2007; 10-01-13 at 10:01 PM.
    SubCamp and CrackedBarry like this.
    09-27-13 09:01 AM
  2. m1a1mg's Avatar
    BBRY is only worth what someone will pay for it. It's the most simple economic theory there is.
    09-27-13 09:12 AM
  3. Komoto's Avatar
    I would say worth 15+

    Prem will make a lot of money off this deal if he manages to get it.
    09-27-13 09:30 AM
  4. anon1727506's Avatar
    If the $4.7 Billion is out of line, there will be others jumping in so they can double or triple their money. But the sad reality is looking a revenues today and looking at projected revenues can make a big difference in the value.

    It's like a used car that you want to sell, it might have a list price of $10K. If you take your time and sell it yourself you might can find someone to buy it from you at that price or just a little below in most cases. But if you are in a hurry and need the cash quickly, a dealer or wholesaler isn't only going to give you a fraction of the "value". BlackBerry is a used car with a motor that is making a knocking sound and is burning smoke, and the transmission slips... it really doesn't matter what the book says they are worth.
    richardat likes this.
    09-27-13 11:12 AM
  5. JasW's Avatar
    BlackBerry is a used car with a motor that is making a knocking sound and is burning smoke, and the transmission slips... it really doesn't matter what the book says they are worth.
    Thanks for not saying the wheels are coming off.
    richardat and Dunt Dunt Dunt like this.
    09-27-13 11:30 AM
  6. Duffman19's Avatar
    Judging by today's q2 results and if the sales are still dropping, it's worth $9

    Posted via CB10
    CrackedBarry likes this.
    09-27-13 02:04 PM
  7. k8bushlover's Avatar
    I have some shares for sale, if you're offering $15.

    If wishes were horses...
    richardat and AfterHoursWelds like this.
    09-27-13 02:26 PM
  8. fin2007's Avatar
    I have some shares for sale, if you're offering $15.

    If wishes were horses...
    LOL, I have some share to sell at $11.

    To say $15 is for other big companies like MSFT/GOOGLE/Lenova/IBM, but I know nobody would would ever bid at $15 right now.
    Even there is another offer, the price is likely fall into $10~$11.
    09-27-13 02:42 PM
  9. Bold_until_Hybrid_Comes's Avatar
    How much did you lose?
    09-27-13 02:44 PM
  10. anon1727506's Avatar
    Thanks for not saying the wheels are coming off.


    Wheels are a "relatively" cheap fix for a car.

    The motor and transmission going out on a modern car that has a $10K book price.... it might be worth more being sold for it's "parts".
    09-27-13 03:01 PM
  11. njblackberry's Avatar
    $15 may be the break up value of the company. Today, it is worth a little over $8.
    09-27-13 03:42 PM
  12. dshusha's Avatar
    I think the title of this blog is probably more accurate ... BB is probably only worth $15 ... total ..not per share
    09-27-13 07:11 PM
  13. PeterC4's Avatar
    just did a quick analysis:

    1. book value dropped to 16.22 per share, a $1.8 drop from previous Q, the $16.22 book value still includes a 941M inventories, not sure if it is already writedown, if not, then the book value would drop to ~$14.6. Even $14.6 is still way higher than the $9 bid price

    2. Service revenue is $736M, comparing to $794 last qtr, a~8% drop,

    3, BES software/other revenue is 80M, need break down to see the BES software revenue.

    4. The book value is tricky here,
    Property, plant and equipment, net 2,119
    Intangible assets, net 3,505
    to be conservative, let's assume property to 1B and asset to 1.5B, a drop of 3B, then the book value drop to $9-$10 even writedown the current inventory to 0 again

    5. Cash flow used in operations in the second quarter was approximately $136 million. Uses of cash included intangible asset additions of approximately $268 million and capital expenditures of approximately $112 million, the real cash burn this quarter is actually $136M, should I say that?


    I still do not get it how th company just worth $9?

    Service and security work worth at least 2-3B here
    BES software worth at least 0.5B here( a price/revenue tag of 2 is unthinkable for a software company, I could not find one), if I put a price tag of 1B, it is still below typical software company's price/revenue.

    The software/Service would easily add $5 on top of the book value.

    That is like $20 per share at this point, even in the worst case, a fair value would be at least $15.
    I am prepared to deliver the equivalent of $500,000 in shares at your valuation in the next business day. I need collateral, so a collateral mortgage on your house, available cash and a personal guarantee subject to that number being equal or greater than $500,000. Let me know.
    09-27-13 11:09 PM
  14. the_sleuth's Avatar
    Now with the kids in bed, I had a chance to calculate BBRY's tangible book value. After dreadful Q2 results, it stands at $9.54 (excluding goodwill from the balance sheet).

    BlackBerry is trading as a distressed asset that just burnt through $0.5 billion in cash! Watsa's LOI price of $9 is close to fair value.

    just did a quick analysis:

    1. book value dropped to 16.22 per share, a $1.8 drop from previous Q, the $16.22 book value still includes a 941M inventories, not sure if it is already writedown, if not, then the book value would drop to ~$14.6. Even $14.6 is still way higher than the $9 bid price

    2. Service revenue is $736M, comparing to $794 last qtr, a~8% drop,

    3, BES software/other revenue is 80M, need break down to see the BES software revenue.

    4. The book value is tricky here,
    Property, plant and equipment, net 2,119
    Intangible assets, net 3,505
    to be conservative, let's assume property to 1B and asset to 1.5B, a drop of 3B, then the book value drop to $9-$10 even writedown the current inventory to 0 again

    5. Cash flow used in operations in the second quarter was approximately $136 million. Uses of cash included intangible asset additions of approximately $268 million and capital expenditures of approximately $112 million, the real cash burn this quarter is actually $136M, should I say that?


    I still do not get it how th company just worth $9?

    Service and security work worth at least 2-3B here
    BES software worth at least 0.5B here( a price/revenue tag of 2 is unthinkable for a software company, I could not find one), if I put a price tag of 1B, it is still below typical software company's price/revenue.

    The software/Service would easily add $5 on top of the book value.

    That is like $20 per share at this point, even in the worst case, a fair value would be at least $15.
    09-27-13 11:20 PM
  15. ALLYSON1989's Avatar
    I can't believe windows Samsung or even apple would take money out of there pocket and pay 5 billion. It's nothing for them. Just think they would have 70 million users immediately. The most secure network. A great product for business and enterprise. I just don't get it. Windows especially since if they buy BlackBerry they could really be a serious challenger to apple or Samsung. Just BBM IS worth 2 billion. They paid 8billion for Skype. I just don't get it

    Posted via CB10
    09-28-13 05:36 AM
  16. cgk's Avatar
    It's not in Apple's nature to make this type of purchase, moreover culturally they would be unable to do it because it would an admission that another OS has something they lack - they might pay patents however when the company is broken up.
    09-28-13 07:23 AM
  17. kfh227's Avatar
    BBRY is only worth what someone will pay for it. It's the most simple economic theory there is.
    Your mistake is saying that price and value are equivalent.

    Posted via CB10
    09-28-13 09:19 PM
  18. m1a1mg's Avatar
    Your mistake is saying that price and value are equivalent.

    Posted via CB10
    No, I only spoke to it's worth. It's value is intangible, and might be fairly decided by someone who is completely unbiased. Someone posting on CB is therefore excluded.

    I've seen the "value" of this company as low as $3 per share. I'm assuming you would disagree with this assessment?
    JeepBB likes this.
    09-29-13 10:16 AM
  19. anon1727506's Avatar
    I can't believe windows Samsung or even apple would take money out of there pocket and pay 5 billion. It's nothing for them. Just think they would have 70 million users immediately. The most secure network. A great product for business and enterprise. I just don't get it. Windows especially since if they buy BlackBerry they could really be a serious challenger to apple or Samsung. Just BBM IS worth 2 billion. They paid 8billion for Skype. I just don't get it

    Posted via CB10
    That 70 million users that are using a totally different OS and no way to transition them to the buyers OS - BlackBerry couldn't even count on getting them to buy from them.

    I think the point is, it ISN'T REALLY ALL THAT GREAT. The are other CHEAPER alternatives that are "good enough" for what most enterprise customers need - and for some these alternatives are better because the provide tools that can be utilized to make employees for productive (apps).
    09-30-13 12:34 PM
  20. sosumi11's Avatar
    I can't believe windows Samsung or even apple would take money out of there pocket and pay 5 billion. It's nothing for them. Just think they would have 70 million users immediately. The most secure network. A great product for business and enterprise. I just don't get it. Windows especially since if they buy BlackBerry they could really be a serious challenger to apple or Samsung. Just BBM IS worth 2 billion. They paid 8billion for Skype. I just don't get it
    Spending other people's money is easy, isn't it?

    Pretend for a moment YOU are in charge of a larger corporation and YOU have to prove that a $5 billion expenditure (not small by ANY means no matter how big the company is) that it will provide a real return to YOUR Board of Directors.

    Napster had 700 MILLION users when they were illegal, yet once they went to a pay service that number dropped to 700 THOUSAND. A service that is assumed free cannot be monetized. And to buy a service (BBM) that cannot be monetized is simply silly.
    09-30-13 02:26 PM
  21. CrackedBarry's Avatar
    If you think it's undervaluated, then by all mean, jump in and buy some shares at 8-9 and make a bundle!

    Te reality of the matter is, that traditional valuations don't always make much sense with tech stocks/companies. That's why Watsa as smart as he was, got burned with his multiple BBRY buys.

    He saw a company, that on the surface had healthy financials and a heathy business/product, and thought he could make a profit. But Watsa never realized how fast the technology business moves, how fickle the markets can be, and that Blackberry was already a dead man walking, thanks to Android, and how badly the company managed its migration to a new OS.

    When the OP looks at the numbers and comes to the conclusion that the stock is worth 15$ he makes one of the same mistakes that Watsa did. He assumes that those 70 million users will stick around. But the reality is, that not only is Blackberry bleeding cash at the moment, its also bleeding users. Half or most of those 70 million can easily be gone in a year.

    That's why, even at 8-9$ BBRY is still a risky buy, and why no other buyers have appeared.
    10-01-13 09:04 AM
  22. fin2007's Avatar
    If you think it's undervaluated, then by all mean, jump in and buy some shares at 8-9 and make a bundle!

    Te reality of the matter is, that traditional valuations don't always make much sense with tech stocks/companies. That's why Watsa as smart as he was, got burned with his multiple BBRY buys.

    He saw a company, that on the surface had healthy financials and a heathy business/product, and thought he could make a profit. But Watsa never realized how fast the technology business moves, how fickle the markets can be, and that Blackberry was already a dead man walking, thanks to Android, and how badly the company managed its migration to a new OS.

    When the OP looks at the numbers and comes to the conclusion that the stock is worth 15$ he makes one of the same mistakes that Watsa did. He assumes that those 70 million users will stick around. But the reality is, that not only is Blackberry bleeding cash at the moment, its also bleeding users. Half or most of those 70 million can easily be gone in a year.

    That's why, even at 8-9$ BBRY is still a risky buy, and why no other buyers have appeared.

    wrong, I never counted the 70M would stay, if so, you really believe bbry just worth 5b?

    apple per user has about 850 value in stock. right now I only assign like $30 on each bbry user
    10-01-13 10:03 AM
  23. CrackedBarry's Avatar
    wrong, I never counted the 70M would stay, if so, you really believe bbry just worth 5b?

    apple per user has about 850 value in stock. right now I only assign like $30 on each bbry user
    Well you assume that a significant number of BBRY users will stay, as per you including the service revenues in your breakdown.

    As for what I believe Blackberry is worth, on one hand 5 billion is a ridiculously low price, on the other hand it could be worth even less. 3-4 billion, depending on exactly how much their cash holdings are.

    The problem is, that most of BBRYs assets, aside from the patents and QNX (the latter should be worth somewhere between 100-200 million dollars. Their revenues prior to BBRY buying them were only 40 million) is tied up in BBRY's ecosystem.

    BBM and BIS/BES is only worth something if the current BB users stay BB users.
    (If the number of active BB users drop below 10 million, you'll see the value of BBs servers, BBM and MDM drop to very little)

    And as things are going right now, I wouldn't be surprised if we'll see a fairly quick implosion of BBusers. Corporate customers, which used to be the backbone of BBRYs business will emigrate away as fast as they can, and carriers will try even harder to steer customers away from Blackberry handsets.

    You wrote of a ten percent reduction in service fees pr. quarter. I think we will see a much faster implosion of BBRYs base, (UNLESS the future of the company gets clarified). I'd expect a drop of 20-25% in the number of BBRY customers/users or. quarter. Which means that BBRY will have around 20.000.000 subscribers/users around Q4 2014.
    10-02-13 02:50 AM
  24. Zimbad's Avatar
    Spending other people's money is easy, isn't it?
    Napster had 700 MILLION users when they were illegal, yet once they went to a pay service that number dropped to 700 THOUSAND. A service that is assumed free cannot be monetized. And to buy a service (BBM) that cannot be monetized is simply silly.
    the logic of your argument isn't making sense; sorry. Monetizing a service vs paying for a service are 2 completely different things. Google Search is monetized, Youtube is monetized, Facebook is monetized, they make billions in revenue, yet the average user has to pay NADA
    10-02-13 02:59 AM
  25. Fuzzballz's Avatar
    Then buy buy buy, OP! The stock is at $7.50 and falling right now. A great time to get in! heehehehehee
    10-02-13 11:58 AM
27 12

Similar Threads

  1. How much is the BlackBerry Z10 worth?
    By Vics111 in forum BlackBerry Z10
    Replies: 31
    Last Post: 09-28-13, 07:38 PM
  2. Help making my building society listen
    By g33kphr33k in forum BlackBerry 10 Apps
    Replies: 5
    Last Post: 09-28-13, 02:15 PM
  3. Which is the best mobile OS to switch to after blackberry?
    By wanted198 in forum General BlackBerry Discussion
    Replies: 34
    Last Post: 09-28-13, 02:00 AM
  4. Change $ key to key
    By critanime in forum BlackBerry Q5
    Replies: 6
    Last Post: 09-27-13, 06:06 PM
  5. Downgrade to 10.1.0.4181
    By JVOZ in forum BlackBerry 10 OS
    Replies: 1
    Last Post: 09-27-13, 09:22 AM
LINK TO POST COPIED TO CLIPBOARD