Peter MIsek: BBRY BES and NOC may take share price to $30 & possible MSFT takeout
- BlackBerry can still boast of something unique: Its "network operations center"BLACKBERRY IS MAKING concessions to woo companies, giving away the BES software for free, while waiving the network fee for BlackBerry users who upgrade to BlackBerry 10 devices through the end of this year.
The BES software has garnered some prominent early customers, including Skadden, Arps and 20th Century Fox, and 4,600 companies are evaluating the software.
If even a fraction of enterprises take up BES and the NOC, bulls think it could boost the stock.
Peter Misek, who follows BlackBerry for Jefferies & Co., and rates its shares Buy, doesn't expect BlackBerry will win the smartphone wars. But with perhaps 500 million corporate users of email on mobile devices, worldwide, Misek reasons that if just 10% of them were to take up BlackBerry's offer to use the NOC, and if each one paid $100 per year, the result would be a steady $5 billion in revenue for BlackBerry annually.
Put a 42% operating margin on that, and you could be looking at $2.50 per share in earnings, for a stock worth $30 at a P/E multiple of 12. With a steady $5 billion in security revenue, BlackBerry could be attractive to an acquirer, he thinks. For example, Misek speculates that Microsoft might want to boost its standing in mobile by buying the company.
We may know more soon about what a mobile device management stock is worth. The Wall Street Journal reported in March that Good has met with bankers to discuss a public offering that could value the company at $1 billion.
For the moment, BlackBerry shares will trade based on the market's perception of how the Z10 and Q10, and forthcoming models, sell. But the embedded value of the network is worth keeping an eye on.
In an increasingly complex mobile world, that network is an asset that will likely continue to represent real value.
BlackBerry's Plan B: The Network - Barrons.com05-11-13 09:47 AMLike 12 - "if each one paid $100 per year, the result would be a steady $5 billion in revenue for BlackBerry annually. "matthewriedle likes this.05-11-13 10:38 AMLike 1
- Most analysts have completely written off the NOC. A private and secure network connecting 650 carriers, the only one of its kind! The perfect resource for M2M, Smart monitors communicating with municipalities, smart appliances, portable medical devices, defence equipment communicating in remote areas..
I think Misek is the only one that sees the synergies of QNX + NOC. Why would RIM want to split this up? They go hand in hand.05-11-13 10:45 AMLike 6 - If Good Technologies is only worth $1 Billion, BlackBerry should be the ones looking to acquire them. Good is the number two player in MDM behind BlackBerry and if BlackBerry were to consolidate and cement their leadership in that space, this could also generate long term value for the company.fedakd likes this.05-11-13 11:05 AMLike 1
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- Prem has stated he believes it's worth $40+ a share. If you don't get Prem's shares, you don't get the company, simple as that. BlackBerry also has a shareholder rights plan which will make sure no lowball bids end up working.Rooster99 and matthewriedle like this.05-11-13 11:56 AMLike 2
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Put a 42% operating margin on that, and you could be looking at $2.50 per share in earnings, for a stock worth $30 at a P/E multiple of 12. With a steady $5 billion in security revenue, BlackBerry could be attractive to an acquirer, he thinks.05-11-13 12:05 PMLike 5 - I think it's worth lot lot more...none wants to call the insane shots but reality is bit is worth insanely more...matter of time
Posted via CB1005-11-13 01:41 PMLike 0 -
Posted via CB1005-11-13 02:08 PMLike 0 - Also worth adding is his operating margin of 42% on BES seems extremely low. The Z10/Q10 have margins that high, software & services would be in a whole different ball game. Upwards of 75% based on analyst reports I've read. You're right though, it would definitely require a significant premium!
Also in terms of the recurring fees, these are the monthly service fees Misek is getting at here, not the individual CAL licenses. Monthly service fees would likely range ~8$/month or ~$100/year.
W Hoa likes this.05-11-13 03:16 PMLike 1 -
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AirWatch
BES10 is
https://enterprise.ecomm.webapps.bla...000000001.html05-11-13 05:20 PMLike 0 - 05-11-13 05:21 PMLike 1
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Posted via CB1005-11-13 05:21 PMLike 0 - Not true even in the slightest. Each device on the MDM pay a monthly fee. I think the statement of $100 a year is an under assumption as the current BES is over somewhere around the $10 mark. Which would make it $120 per year. But I I am not 100% sure on the fee just going by memory
Posted via CB10
https://enterprise.ecomm.webapps.bla...000000001.html
So from BB's own website. It is between $90 and and $99 depending on volume for a perpetual license. No monthly fees.05-11-13 05:23 PMLike 0 - You need to check again. There is no recurring monthly service charge for BES 10. I challenge you to go to the BES 10 website and find it.05-11-13 05:25 PMLike 0
- Quite defensive are we? Odd...
Just an FYI - I work for a large corporation in Canada (>3000) employees. We use BES10. As part of the BlackBerry ready program, our BlackBerry CAL upgrades have been free, and monthly service fees have been waived for a trial period. I'm amazed you are ignorant enough to believe that all pricing information for a comprehensive solution such as BES10, would be contained on a single page on the BlackBerry enterprise website. There you have it, an answer from an individual working for a corporation that disputes your knowledge gained from visitng the "BES 10 website"!
Have a great day Bluenoser63!
05-11-13 05:42 PMLike 3 - Quite defensive are we? Odd...
Just an FYI - I work for a large corporation in Canada (>3000) employees. We use BES10. As part of the BlackBerry ready program, our BlackBerry CAL upgrades have been free, and monthly service fees have been waived for a trial period. I'm amazed you are ignorant enough to believe that all pricing information for a comprehensive solution such as BES10, would be contained on a single page on the BlackBerry enterprise website. There you have it, an answer from an individual working for a corporation that disputes your knowledge gained from visitng the "BES 10 website"!
Have a great day Bluenoser63!
Here is a link for the Blackberry Ready program. Please show me where your monthly service fees are waived..
Program Overview - Canada
Since you are migrating from BES 5, you do have server costs and legacy service fees. A new BES 10 customer who is not migrating does not have any service fees. So please, before you state something about BES 10 as a service going forward, do some reading.05-11-13 05:54 PMLike 0 - So what is the answer? Does BES represent recurring revenue for BB or not? As an investor I think this is a pretty important question to have an accurate answer for05-12-13 08:41 AMLike 0
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Posted via CB10matthewriedle and AT_Nepal like this.05-12-13 08:44 AMLike 2 - BlackBerry can still boast of something unique: Its "network operations center"BLACKBERRY IS MAKING concessions to woo companies, giving away the BES software for free, while waiving the network fee for BlackBerry users who upgrade to BlackBerry 10 devices through the end of this year.
The BES software has garnered some prominent early customers, including Skadden, Arps and 20th Century Fox, and 4,600 companies are evaluating the software.
If even a fraction of enterprises take up BES and the NOC, bulls think it could boost the stock.
Peter Misek, who follows BlackBerry for Jefferies & Co., and rates its shares Buy, doesn't expect BlackBerry will win the smartphone wars. But with perhaps 500 million corporate users of email on mobile devices, worldwide, Misek reasons that if just 10% of them were to take up BlackBerry's offer to use the NOC, and if each one paid $100 per year, the result would be a steady $5 billion in revenue for BlackBerry annually.
Put a 42% operating margin on that, and you could be looking at $2.50 per share in earnings, for a stock worth $30 at a P/E multiple of 12. With a steady $5 billion in security revenue, BlackBerry could be attractive to an acquirer, he thinks. For example, Misek speculates that Microsoft might want to boost its standing in mobile by buying the company.
We may know more soon about what a mobile device management stock is worth. The Wall Street Journal reported in March that Good has met with bankers to discuss a public offering that could value the company at $1 billion.
For the moment, BlackBerry shares will trade based on the market's perception of how the Z10 and Q10, and forthcoming models, sell. But the embedded value of the network is worth keeping an eye on.
In an increasingly complex mobile world, that network is an asset that will likely continue to represent real value.
BlackBerry's Plan B: The Network - Barrons.com
In regards to a take out, I think it is an interesting idea but an improbable one. Unless BB gets into real trouble (which seems unlikely under current conditions), I do not see the federal government approving the sale. They will scuttled the deal, either in the public eye or behind closed doors.
Having said this, I could see some sort of common buy in arrangement with MS that could bring the two companies closer together. I see this as a real positive for both companies for a couple of reasons. First, MS is struggling in the mobile computing space. It is quite clear that they are unhappy with Windows Mobile OS; they are yet again on a course to revamp the OS (~12-18 months of work). It is also clear that Nokia shareholders are unhappy with the company's commitment to Windows 8 and would like to abandon it. Samsung and Sony are basically losing money on this venture. MS knows it must have a strong presence in the mobile computing space; it is a growth field and it threatens the primacy of the desktop windows platform (the company cash cow). Second from BB perspective, some level of integration with a traditional desktop platform would open BB10 to a broader group of consumers.
Adding fuel to the fire, we know that MS has a strong interest in RTOS like QNX as they tried this approach with Windows 7 mobile. They see the advantages and would like to effectively move past the competition with the next generation of OS. However, I don't think a buy out would be in the best interest of either company. To be forthright, MS may have market presence and money to burn but they have a long history of being a slow lumbering giant. That is what happens when a company solely focuses on acquisitions as a growth strategy. One can't also ignore the fact that they missed the entire mobile computing idea for the first 5 years. The new BB has shown their ability to adapt and advance the mobile computing space. Their near death experience over the last 18 months has sharpened their focused and their agility.05-12-13 09:37 AMLike 4
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Peter MIsek: BBRY BES and NOC may take share price to $30 & possible MSFT takeout
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