1. wout000's Avatar
    We have been bullish on BlackBerry (BBRY) as large insider Prem Watsa's Fairfax Financial (OTCQB:FRFHF) rescue continues to unfold as outlined in our article here on SA.
    We also had numerous hopes/suggestions for the BBM service that came to fruition, and we now can see their benefits creeping into BBRY's share price.

    The most important improvement was the opening of the BBM free messenger service to Apple's (AAPL) IOS devices and to Google's (GOOG) Android devices. The adoption of BBM initially spiked and added some 30 million users taking the BBM user count to 85 million. Moreover, BBM downloads seem poised to ramp again since the announcement of the Facebook (FB) WhatsApp deal for two reasons. First, WhatsApp plans to start charging for their service after one year of usage and BBM remains free. Second and probably most important and not very well known is the release of a free user to user voice service over BBM. The service works very nicely. The voice quality is superior to Skype and Magicjack (CALL) in our opinion. And this beats WhatsApp to their anticipated voice service by approximately 2 months.

    Another SA article here on SA argues that BBM alone is worth $2.5 billion based on the WhatsApp purchase for $19 billion by FB. We think that's very low. We wrote in SA that BBM should be valued using the FB's $110 billion valuation back in September 2013 extrapolating a $5 billion valuation for BBM alone.

    FB's mushrooming valuation since September to today's fully diluted market cap of $188 billion gives our BBM $5 billion valuation a 71% boost bringing its value on a standalone basis to $8.5 billion. BBRY has total market cap based on yesterday's $10.60 closing price at $6.85 billion adjusted for conversion and dilution, which is a significant discount to our stand-alone BBM valuation and gives zero consideration to BBRY's significant other assets such as the patent portfolio and its real estate.

    BBRY CEO John Chen said yesterday on Bloomberg that he would consider a sale or spin-off for BBM. This is good news for shareholders. Special situation hedge funds may soon join Dan Loeb in his BBRY bet. Especially given the remaining 93.6 million share short position in BBRY as reported by Nasdaq.

    Given our long term belief in the paradigm shift of mobile computing dominance over desktop computing, the solid core BBRY technology platform with its large installed base and the large financial backing by insider Prem Watsa with his ability to continue to guide BBRY though this transitional period for the company, we think our previous target price of $20+ over the next 18 months is very achievable. And don't forget those shorts may have to cover quickly if there is a watershed event like a spin out of BBM.
    Source: http://seekingalpha.com/article/2049...e?source=yahoo
    Posted via CB10
    02-26-14 04:55 PM
  2. NinjaB's Avatar
    slightly surprised to see a positive article on sa...

    although they're not nearly as bad as motley fool when it comes to their blind BlackBerry-hate.

    but as for the 8.5B valuation of BBM, I think that's wayyy too high considering Viber's recent acquisition price.. i'd say more in the range of 2-4.5B after voice, excluding any major changes, like cross-platform video, or news that they have crossed 100m/125m+ users...

    I'm also curious how/if selling BBM would benefit BlackBerry long-term... obviously if they could sell it for 8.5-10b that would be a huge injection of cash and would truly (finally!) secure their future for at least 3-5 years... but if BB is talking about being service/software company as much as hardware, isn't that kind of like selling your cash cow? because IF bbm ever does get to be valued that highly, that means it will have made some major improvements and is being received very well.. so why get rid of it then?

    it seems kind of like a catch-22... I could see wanting to sell it right now, you need money/stability, and it's position in the global messaging market is still unsure... so anything you can get is a guarantee...

    but if it picks up any sort of serious steam in the near future, and BB is able to monetize while doing it, then it seems you have achieved your goal of generating a revenue stream to replace service revenues.. then why not keep it??

    I don't claim to know a lot about something like a spin-off or sale of BBM division so maybe BB could/would still somehow generate revenue while also getting a lump-sum (posisbly reduced)...

    how do others feel about Chen saying he would sell BBM?
    02-26-14 06:56 PM
  3. Rello's Avatar
    I feel like this doesn't matter.

    BBM is at the mercy of how fast whatsapp adds features. I love BBM but once whatsapp adds things like Voice and video, it's harder to argue for BBM since whatsapp has such a large user base. Hopefully BlackBerry can keep the features coming in a timely manner. If they let whatsapp catch up in features it's over in my opinion

    Posted via CB10
    02-26-14 07:50 PM
  4. THBW's Avatar
    I see your point but Whatsapp has neither voice or video at the moment. They are are woefully behind in other areas as well. Further BBM is rapidly transitioning to a unified communications platform accessible on multiple devices. Whatsapp is simply incapable of this until it adopts sort some of universal ID.

    Posted via CB10
    02-26-14 08:11 PM
  5. NinjaB's Avatar
    http://blogs.blackberry.com/2014/02/bbm-2-update/

    THBW, everyone has voice now, but I don't believe video works cross-platform yet or they def would mention it...

    Rello, I agree BBM needs to stay ahead of WhatsApp in features, not just equal... but if they can do that with at least one compelling feature at all times, imo it does matter... at least BBM could have an advantage to hang it's hat on while still building userbase...
    Rello likes this.
    02-26-14 11:03 PM
  6. Rello's Avatar
    http://blogs.blackberry.com/2014/02/bbm-2-update/

    THBW, everyone has voice now, but I don't believe video works cross-platform yet or they def would mention it...

    Rello, I agree BBM needs to stay ahead of WhatsApp in features, not just equal... but if they can do that with at least one compelling feature at all times, imo it does matter... at least BBM could have an advantage to hang it's hat on while still building userbase...
    Because whatsapp has such a humongous lead, I do feel like BBM needs more than just one feature to hold above them...but I pretty much agreed with u. If BBM doesn't stay ahead in features there won't be much of a argument to use BBM over whatsapp.

    Posted via CB10
    02-27-14 07:13 AM
  7. rohetaku's Avatar
    Because whatsapp has such a humongous lead, I do feel like BBM needs more than just one feature to hold above them...but I pretty much agreed with u. If BBM doesn't stay ahead in features there won't be much of a argument to use BBM over whatsapp.

    Posted via CB10
    Just wait for eBBM! Whatsapp he NO lean on that!

    Posted via CB10
    02-27-14 07:25 AM
  8. Rello's Avatar
    Just wait for eBBM! Whatsapp he NO lean on that!

    Posted via CB10
    You are correct. Whatsapp won't be able to touch eBBM when it comes to security

    Will this lead to a huge increase in users for BBM though? I think it could go either way but I learn more towards no.

    BBM just needs to keep bringing the features at a steady pace. They need to add desktop compatibility and the ability to to access it from multiple devices. Like a poster above, those are features I don't think whatsapp will match anytime soon. They would give BBM a huge advantage in my opinion

    Posted via CB10
    02-27-14 07:40 AM

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