Seeking Alpha


  • Get Long. Get Short. BlackBerry's Value Ain't $8 [View article]
    I was admittedly a big fan of the management changes that took place at BlackBerry over the last 18 months or so and firmly believed Mr. Heins and the team he assembled would put the company back on track.

    I even wrote as such back in April:

    Considering recent developments, nicely outlined by the author here, in addition to the very poor marketing of BB10 and several other controllable setbacks, it appears my faith was perhaps misplaced.

    I guess we will have to wait and see how events unfold, but the details of the relationship between Mr Heins, Mr Watsa, and the rest of BlackBerry board vis-a-vis this bid have very poor optics.
    Sep 29 12:40 PM | 7 Likes Like |Link to Comment
  • Shareholder Inequality: Fairfax's Other Motivations In Its Bid For BlackBerry [View article]
    I have to agree that this bid is somewhat curious in terms of both the vague structure/financing as well as the timing. Fairfax has clearly positioned itself nicely for various scenarios as the author outlines, notably a short term floor on the price of BBRY.

    The one things I would add however, is that Prem Watsa also has some serious credibility risk for both himself and Fairfax. If it comes to light that this is a bad faith proposal, there would consequences.

    For this reason I think we may have to wait a little longer to see how this unfolds, as there may be more cards left to play.
    Sep 26 07:32 PM | 1 Like Like |Link to Comment
  • BlackBerry: The Bear Case, The Bull Case And My Case [View article]
    It is true actually, it just depends on how many days you are using to calculate average volume. There is more than one answer to be fair.

    For average volume, much like average volatility, you can use 30, 60, 90, 180 days, or whatever you feel will provide the most useful metric for the question you are trying to answer.

    In this case for a stock that has had as little as 10m and as many as 225m shares trade in a day YTD, thus making average volume, and the short ratio very volatile, I feel a longer period is more representative.

    Using the the 30 day average volume you are correct that the short ratio is around 10 days. Using 90 days of volume, the days to cover is closer to 5.

    I would expect anyone with a sizable short position in BBRY is looking at days to cover in multiple time frames.
    Jun 27 03:01 PM | 1 Like Like |Link to Comment
  • BlackBerry: The Bear Case, The Bull Case And My Case [View article]
    While the percentage of the float that has been shorted is very high for BlackBerry, the short ratio, or days to cover, is much more manageable at 5 days.

    Because BBRY is such a liquid stock, any sophisticated short can work out of the position reasonably quickly (barring an immediate spike).

    To put this in perspective relative to some other Tech names, days to cover for BBRY is the same as INTC at 5 days, about a day and half less than NOK, and only one day more than IBM.

    That having been said, I have a hard time seeing the risk reward in being short in front of earnings.
    Jun 27 02:06 PM | 2 Likes Like |Link to Comment
  • BlackBerry: Discussion Of 4 Major Topics Prior To Q1 Earnings [View article]
    Margin composition will be a crucial metric to watch going forward. While the higher hardware gross margin will help mitigate declining service revenue from existing users, the two income streams certainly have different risk profiles.

    That having been said, the success of licensing BES 10 for corporations using iOS and Android devices could potentially be a significant new revenue stream. Far too early to tell at this point though, IMHO.
    Jun 27 09:48 AM | 1 Like Like |Link to Comment
  • BlackBerry CEO Thorsten Heins Keeps His Word [View article]
    I fully agree that Thorsten Heins has done a remarkable job in a relatively short period of time, and he is one of the key factors to have confidence in BlackBerry going forward.

    It is not just Heins however that deserves credit for getting the company back on track, but his entirely revamped management team, which I outlined a couple of months back.

    Heins has instilled a new vision and direction for his team, and the fact that the company been consistently meeting deadlines again, shows his plan is coming to fruition.
    Jun 27 08:54 AM | 3 Likes Like |Link to Comment