We in the UK have recently unhappily discovered that we were sold beef that was, rather, 100% horsemeat. Similarly, readers of Forbes and BGR will realize today that they didn't read breaking news Friday regarding Samsung's (OTC:SSNLF) foray into the enterprise business, but rather that they read an old story spruced up by bearish BlackBerry (BBRY) shop Fenton Detwiler and designed to drum scary headlines:
The second bear raid on BlackBerry in a week was predicated on research from Fenton Detwiler and kindly headlined out the door by BGR and BlackBerry favorite, Eric Savitz at Forbes. Here is the excerpt from BGR (for a change, emphasis added):
"Boston-based brokerage firm Detwiler Fenton said in a note on Friday morning that Samsung plans to unveil a new enterprise platform at the Mobile World Congress trade show later this month that will compete with BlackBerry's next-generation BlackBerry 10 operating system. No other details were provided, but the news comes as a huge blow to BlackBerry."
The story here, most incredibly, is that this was not news. Samsung had launched SAFE last year and it has been speculated about in the mainstream press all year long. In fact, Bloomberg didn't even run the story. Do you know why? Probably because it was old news Bloomberg/Businessweek ran last December! The punch line there ended with:
"The bottom line: Samsung aims to pick up enterprise business from RIM and offer better service than Apple and other rivals."
This was a well-documented move from Samsung that will no doubt offer multiple OS management etc. There should be no surprise of the hiring salespeople that Fenton Detwiler flag as Bloomberg/Business Week alluded to this push last December?
Where is the Beef in this news story? Maybe Fenton Detwiler should have linked back in its research note to the Bloomberg story and BGR and Forbes shouldn't re-package horsemeat and pass it on as Beef?? Maybe even footnoting Bloomberg would be the courteous thing to do?
Is this 'New' Threat Credible? Is BlackBerry SAFE from Samsung's SAFE?
Anything that Samsung does needs to be taken seriously due to the behemoth of the organization, but it is not an organization known for software development. Here is a technical point of view on the SAFE that I picked up on at Crackberry.com that offers a different POV (my technical knowledge has reached its limits here and this user explains this so clearly):
"Unless they buy an MDM solution all they are offering is an API set other MDM's could incorporate (similar to Apple's API for iOS). I've yet to see one of the major MDM solutions adopt S.A.F.E. as frankly there's not much interest using Android as a corporate standard. Yes you have some places that are going to allow Android via a solution like Good Technology but it's really not the same and the user experience takes a hit.
Frankly BlackBerry has been in the MDM space for over 10+ years. They understand enterprise needs and have made nice solutions to provide functionality and management of their devices. Not sure I'd jump fully into what Samsung is selling as for now it's basically vapour ware.
According to Forrester Research senior vice president and analyst Ted Schadler:
"The big thing that's going to be a problem that I think we'll start to really see in 2013, and it's related to [mobile device management] and control, is usability. So when you put in a [mobile device management] solution that forces your employees to use a clunky, slow mailbox, or log in every time, or have a poor user experience, they'll just ignore it," he says.
Samsung's SAFE represents clunky, bandaged type offering that Forrester is alluding too. People should also consider that Android is open source OS built on numerous stacks, fragmented, and basically unsafe. (Hence Samsung effort to re-baptise it with "SAFE"…Android is anything BUT Safe)
Conclusion: If you sold on that news you sold on old news surrounding 'vaporware' (Software that never really materializes) and if it does, there is no assurance of its success given the huge (Android-rooted) obstacles.
Why is this important to you?
The scantiness of the news story here shows you that the short sellers are throwing the kitchen sink at BBRY, and if this is the best they have, this is a sign of desperation.
This is becoming increasingly visible in daily trading patterns:
-A news story is put out to short 'Friendly' news outlets [BGR, AllthingsD, and certainly Forbes]
-The media outlets cover the story, shape into a scary headline, and get it syndicated (spread through other news outlets)
-Vicious intra-day selling begins initiated by the short sellers in the form of a coordinated bear raid,
-The selling confirms the veracity of the Ghastly 'Headline' story at BGR, Forbes etc.
-Smaller investors once again lose money
Will the authorities stop this? Nope, it's just too difficult to prove. What authorities may do is ask to see that short sellers had borrowed the stock prior to the sale, or at minimum gotten a locate on the stock. This is a step they may well have missed.
But The Market Will Stop Them
The problem with this strategy is that it is increasingly obvious to the market and reeks of desperation. Yet these analysts persist because they have to answer to their clients, and those clients were told to sell short BBRY a long time back and are losing a lot of money. Clients expect the analyst to now do their best to get them out of this losing trade at a reasonable price….
But. …tactical trading hedge funds have taken notice and have started chasing the shorts back up - please see Thursday's $2+ move in the shares (Counting pre-open sub $13 price) not driven by ANY news.
How do you trade this?
Quite simply every bear raid is an opportunity to chase the reversal; in Wall Street parlance, "Sell the rips and buy the dips." As this continues the market should naturally grow weary of the 'Headline' noise emanating from known news outlets quoting Bearish analyst. The headlines will lose their effect just as those outlets lose credibility, and the arbitraging of rips and dips should end.