1. dbmalloy's Avatar
    Maybe things are actually turning around.. Citron is a notorious short position company.....

    Link and story follows

    BlackBerry Up 5%: Citron Sees $15 Value, Shorts Are All Wrong - Tech Trader Daily - Barrons.com

    BlackBerry Up 5%: Citron Sees $15 Value, Shorts Are All Wrong

    By Tiernan Ray

    Shares of BlackBerry (BBRY) are up 45 cents, over 5%, at $9.01, after the stock got a thumbs up this afternoon from the most unlikely of places, notorious short sellers Citron Research, who argue today that short sellers are misguided in their negativism on the smartphone maker.

    As a short seller, nothing creates a better investment opportunity than a heavily shorted stock based on a flawed thesis, write the Citron team.

    Citron argues short-sellers are still fixated on the companys defeat in the smartphone market at the hands of Apple (AAPL) and Google (GOOG), but that they need to get over it.

    What makes the situation more interesting is the incredible amount of unwarranted bearishness coming from Wall Street analysts. Virtually every major Wall Street firm currently has a Hold or Sell on the stock, based on the same substantially flawed analysis.

    Instead, the firm argues CEO John Chen, installed in November, has significantly de-risked the balance sheet of the company, an improvement that is not reflected in media coverage of a failing handset maker:

    The new strategy eliminating device inventory risks and refocusing on enterprise software business has already significantly de-risked Blackberrys balance sheet. Street estimates of its cash position outlook in the future largely portray the company stabilizing its cash flow within the next few quarters. RBC, for example, sees Blackberry stabilizing its cash position in the 3rd quarter of fiscal 2015, which is three quarters from now. While investors are bombarded on a daily basis with media articles about the struggling handset maker as if the Company was going to fall apart any day, the reality is it has a healthy balance sheet, with ample liquidity to execute its turnaround strategy and make the necessary investments for growth.

    The authors lambast various misperception examples, including an article by BusinessWeeks Joshua Brustein yesterday the journalist ridiculed Blackberrys recent press release of selling 1,000 BB 10 devices and further emphasized the fact that at its peak, Blackberry sold 7,000 phones per hour and they attack a report by Citigroups Ehud Gelblums December 10 initiationof coverage with a Sell rating, writing Again, the analysts focus here is still on BB10 devices and has yet to manage to realize Blackberry today is an enterprise software play. Why? Its because the Citi research analyst covers Communication Equipment rather than Enterprise Software.

    The authors write that all these parties are missing The New BlackBerry, a software company:

    It is going to be an enterprise software company with focus on mobile device management solutions and other potential mobile enterprise software opportunities. The Blackberry today is a fundamentally different company from the old Blackberry that investors were familiar with just a short few months ago before John Chen stepped in.

    After lauding BlackBerrys BES device management software, its BBM group-messaging application, and its QNX embedded operating system, the authors argue for the value of the companys patent holdings:

    Analysts have pegged different value on Blackberrys patent portfolio, ranging from $1 billion to $3 billion. The company was ranked 20th in number of US patent approval for 2013 with 1334 patents approved over the course of the year. Its market capitalization today is a small fraction of virtually every single one of the companies ranked in top 30.

    In conclusion, the authors cite this as one of their rare long positions:

    Our readers will know that Citron does not undertake a long position in any stock often. And when we do recommend a stock, it is with a reason. (For example, we tweeted about APOL below 20 (after having exposed its major regulatory vulnerability in 2009 when it was over 80), MOVE at 11 in May 2013, WUBA at 24 in October, ATHM below 30 in December. We shared our SOHU valuation analysis writeup (March and August 2012, when the stock was in the 40s). These positions have stood the test of time respectably. It is Citrons opinion that Blackberry shorts would be well served to update their research. (Many already have: short interest has fallen from over 32.2% in mid-November, to appx 20.7% as of 12/31/13.) It is Citrons opinion that it is suicidal to bet against well-capitalized strong management in the enterprise mobile space. Its just our honest opinion that once conservative valuations against Blackberrys very viable and highly legitimate enterprise technology businesses are in place, this stock could easily double. The anticipated 2014 IPOs of much less firmly-rooted competitors will only serve to bolster this thesis. Of course as always Cautious investing to all long or short.
    rarsen, GTiLeo, ghundiraj and 2 others like this.
    01-17-14 01:12 PM
  2. anon1727506's Avatar
    This whole Article could have been written last year.

    It is Citron’s opinion that it is suicidal to bet against well-capitalized strong management in the enterprise mobile space. It’s just our honest opinion that once conservative valuations against Blackberry’s very viable and highly legitimate enterprise technology businesses are in place, this stock could easily double. The anticipated 2014 IPO’s of much less firmly-rooted competitors will only serve to bolster this thesis.

    Well Capitalized??

    Viable?

    What does some company's IPO in 2014 have to do with BlackBerry and the competition that is outselling them today? The is no need to even consider the difficulties a future competitor might have.
    sentimentGX4 likes this.
    01-17-14 02:52 PM
  3. morlock_man's Avatar
    This whole Article could have been written last year.




    Well Capitalized??

    Viable?

    What does some company's IPO in 2014 have to do with BlackBerry and the competition that is outselling them today? The is no need to even consider the difficulties a future competitor might have.
    They're comparing them to Good, AirWatch and MobileIron, not Apple and Samsung, and saying that BBRY's BES solution is vastly undervalued.

    AirWatch's IPO could bolster BBRY's valuation in the same way that BBM and BBM Channels are expected to bolster BBRY's bottom line when they come up with a monetization strategy and grow their userbase to larger numbers.
    01-17-14 03:17 PM
  4. leamago's Avatar
    While doing my normal stock trading today, suddenly, I see my bar graph for BBRY spiking continuously for 4 minutes (no joke). With one hand on the "sell" button I searched several internet sites before I found this article. Back on Dec 6th 2013 I bought BBRY that now accounts for 75% of my total portfolio. After doing research since August last year, I concluded the exact findings as this article (except the article did not go into BBM Channels potential or TYPO will soon belong to BBRY). I spoke to several people during that time and was laughed at. When the stock bottomed I had to go with it and bought at 5.93US. Today, I am a happy person and not because I'm richer, but because I can keep using my BB devices and the fact that I'm a good stock picker.
    01-17-14 11:37 PM
  5. notafanboy's Avatar
    BlackBerry is grossly undervalued.

    Posted via CB10
    01-19-14 09:34 AM
  6. anon1727506's Avatar
    When the stock bottomed I had to go with it and bought at 5.93US. Today, I am a happy person and not because I'm richer, but because I can keep using my BB devices and the fact that I'm a good stock picker.
    You have done great. But there are plenty of others who were convinced by others that buying at $18, $15, $12 were smart buys.

    I don't see $15 until BlackBerry provides a viable product that is more than a good idea with potential.

    Posted via CB10
    01-19-14 11:13 AM

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