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Doing The Research Gives You The Answers. Looking for Disruptive Technology And Comeback Stories. Finding Overhyped Situations.
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  • Branson Enters LatAm With Virgin Mobile

    This past weekend, to articles were published regarding Richard Branson's Virgin Mobile coming to Mexico to challenge his bigger billionaire friend Carlos Slim. Forbes and The Guardian did a pretty nice job describing the opportunity in Mexico, especially in light of their pro competition constitutional amendment affecting telecom giants directly. The Telegraph's article missed the correct description for NII Holdings (NASDAQ:NIHD) and described the company as Sprint's LatAm subsidiary. The reason for this mistake is NIHD's use of Nextel as its brand in LatAm. The Forbes piece had an interesting quote from Branson:

    " In an exclusive interview with Expansión magazine this week, Branson said that he is getting ready to enter the cell phone market in Mexico, currently controlled by Carlos Slim's América Móvil. "I think there's room for both of us. I don't think [Slim] will suffer much from our presence," he told the magazine."

    Their business plans are completely different as Branson's requires leasing airwaves from operators with excess capacity. This could bode well to increase the cash flow for NIHD in a shorter period than analysts are expecting. In fact, maybe NIHD could come up with a new fresh branding for themselves to shed the Nextel label. We shall see.

    Tags: NIHD, AMX
    Sep 30 6:36 AM | Link | Comment!
  • BlackBerry BES 10 News Buried Between Press Releases

    While going through the BlackBerry (NASDAQ:BBRY) SEC filings yesterday, I saw a 6K that referenced a press release by the company on September 24, 2013 that seems to have been overlooked by many BBRY watchers. However, the 6K seems to have disappeared from the SEC site (lots of filing issues with BBRY recently), but I found the press release on the company's website with the headline "Tech Data To Offer BlackBerry Enterprise Mobility Management Solutions ". The whole seems very fishy to me, but I do think there may be some light being shed on what is going on in Waterloo. Some excerpts from the release:

    "said Heather Murray, director, TDMobility at Tech Data. "We've talked to many IT Administrators and there is a common theme that emerges - they all count on the security, user experience and total cost of ownership that comes with BlackBerry Enterprise Service 10. Now that BlackBerry is embracing multi-platform environments by extending the same security to iOS and Android devices, this product offering is attractive to our channel of solution providers." ......

    "To date, more than 25,000 BlackBerry Enterprise Service 10 commercial and test servers have been installed globally. According to an enterprise mobility market study by J. Gold Associates, the BlackBerry enterprise solution remains the most strategic mobile device management solution for enterprises today."

    So, despite all the bad news coming out, BES 10 adoption by enterprise CIOs seems to be getting some traction going form 18,000 installs in July 2013 to 25,000 install in September. Why are they burying this information? My feeling is all C level mangers should be shown the door immediately, except the ones in charge of BES. What a tragedy in Waterloo. Maybe Thorsten does have a Napoleon complex after all. It's all over TH, leave Waterloo and let the engineers run the place, they won't need the jets, take those gas guzzling beasts with you.

    Will anyone like an MSFT, IBM or even Oracle come in and buy the BES division? Having witnessed a messy situation where there is a lot of management infighting, lots of things happen that don't make sense. There truly seems to be some sabotaging going on at BBRY and Prem Watsa seems to be in the middle of it.

    Sep 26 3:10 AM | Link | Comment!
  • Anatomy Of A Takeunder: Blame The Insiders

    As a dark, misty cloud falls over Waterloo,Ca, the hometown of BlackBerry (NASDAQ:BBRY), investors are left to ponder all the misdeeds that have been cast upon the storied smartphone innovator. Mike Laziridis, founder and engineer visionary, built the smartphone innovative company on the promise of short messaging service "sms" messaging even before the phone was incorporated into the device. Here is a picture of the early RIM 950 pager/sms text messaging device in the bottom left:

    (click to enlarge)

    Of course, sms has come a long way since the introduction of this device. But it is the easiest and most popular way for phones to become smart, even more popular than email with the younger generation.

    So how did such an early innovator with a great head start on the coming text craze go so wrong so quickly. Remember, that BlackBerry was the communication device leader as recent as 2008 and since then the stock chart looks like a view from the side of Mount Everest : (click to enlarge)

    We think that it important to look at the insider ownership and the leadership in the company to figure out what happened since 2003 and what is happening now. First, lets take a look at visionary founder/insider Laziridis and his insider Co-CEO Jim Balsillie pictured here in happier (tongue in cheek) times:

    The Guardian has some of their now infamous/ridiculous quotes here:

    "On new technologies: "Cameraphones will be rejected by corporate users." - Mike Lazaridis, 2003.

    On the threat from the iPhone: "[Apple and the iPhone is] kind of one more entrant into an already very busy space with lots of choice for consumers … But in terms of a sort of a sea-change for BlackBerry, I would think that's overstating it."- Balsillie, February 2007.

    On the iPhone (again): "Again, I have said this before and I will say it again; Apple has done the industry an enormous favour because they basically told the world to expect a media player [the iPod] as a software feature on a good smartphone. As the leading smartphone appliance company and platform company, we could not buy that kind of validation for $100m."- Balsillie, April 2007.

    On the iPhone: "As nice as the Apple iPhone is, it poses a real challenge to its users. Try typing a web key on a touchscreen on an Apple iPhone, that's a real challenge. You cannot see what you type." - Balsillie, November 2007.

    On the tablet market: "So the question you have to ask yourself is when it comes to tablet, what market or what opportunities, still, it's solving, what problem is it solving, and is it just a replacement laptop? I think that's a difficult one to judge." Lazaridis, April 2010."

    Of course, they could not have been more wrong. There has been recent talk of Laziridis mulling a bid of his own to take BBRY private. I really don't see how anyone would finance him in this effort, do you?

    Next up, we have Prem Watsa, the Chairman and CEO of Canada's Fairfax Holdings and until recently, often regarded as the Warren Buffet of Canada. I think he may have shed that reputation like a snake shed's his skin. Here is why and not to reinvent the wheel, I will quote from fellow SA writer Quoth the Raven who sums it up for me here in this excerpt:

    It's Starting to Just Simply Look Like Fishing

    In light of all the news that came out last night, it's starting to look like an operation simply set up to bring in other bids on the company.

    You don't need to be an MBA student to realize that there isn't a lot of substance behind the Fairfax deal ...

    ...between now and the time the buyout will close (if they find financing, remember), it's starting to look like this bid may have been intentionally set up like this to try and tip over a long line of dominoes in a bidding war.

    The problem? No one else seems to be interested in buying BlackBerry. ...

    Quoth, you had us at "Fishing"! The worst of it is that Watsa is an insider with 10% of the company. And he recently resigned from the board in order to avoid "conflicts of interest". Well, to be sure, this avoidance has not materialized. I think the class action lawsuit firms like Millberg LLP, Slater & Gordon and Pomerantz Grossman Hufford Dahlstrom & Gross LLP are licking their chops to file something against this board. We just hope Watsa's Fairfax insurance companies are not the issuer of the BBRY D&O policy.

    We are of course upset at what has happened here at BBRY. The BB10 technology was and is sound. The marketing and rollout of the devices using it has been dreadful at best. CEO Thorsten Heins need to resign and give up his severance package in order to save what skin and honor he has left after this horrible last 9 months. We know there are a lot of angry investors. Is there value in BBRY, yes but the insiders such as Watsa and Laziridis have done their utmost to query any quest to find it. To us, what should have been a time for either the resurrection or takeover of BBRY has become a time to watch a takeunder- when the price of the first deal is the high bar from where the next participants most likely bid less than the first bidder. Three words sum this up for us: mad, bad and sad.

    Disclosure: I am long BBRY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Additional disclosure: But selling calls to hedge my position and capture volatility.

    Sep 25 7:41 AM | Link | 6 Comments
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