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BlackBerry Z10 Hits The US Next Week, Analyst Hits Reverse... Again

|About:BlackBerry Ltd. (BBRY) Includes:CF Industries Holdings, Inc. (CF)

Our checking shows next week is the official launch for the BlackBerry's (NASDAQ:BBRY) new Z10. US citizens can finally and legitimately get their hands on the much-awaited smartphone device. {photo ubergizmo }

Our calls to T-Mobile, Verizon and AT&T all confirm that sales force training is well under way. Ad-hoc discussions with their sales representatives reveal that they are excited about the new BBRY devices and are taking names from interested parties on a waiting list. By all accounts, there are a lot of inquiries for the sleek new device. Also, T-Mobile will carry both the Z10 and the qwerty keyboard Q10 coming a little later this spring. We have been told off the record and now it is reported that T-Mobile will start Z10 sales next week to selected users. We have placed our name on a list and have been told we will be called Friday to see if we qualify.

Here is a chart showing BBRY trading volume has dropped considerably over the last 14 trading sessions as reported by NASDAQ:

With the outstanding short interest going up, this drop in volume actually increases the days to cover ratio which was 1.680736 with average trading volume at 81,221,373 shares per day. This ratio goes to 2.69 if we used average volume of approximately 50.6 million shares a day which is approximately where we are over the last 14 sessions. This could be troubling news for short sellers of BBRY as aggressive traders on the long side watch these ratios carefully.

Meanwhile, we have to wonder the ultimate motives of Canaccord Genuity and their ever changing position on BlackBerry the widely acclaimed Z10.

Here are some excerpts their BBRY analyst Mr. Walkley's ever changing views:

"The Canadian Press
Published Tuesday, Feb. 19, 2013 11:37AM EST

TORONTO -- Canaccord Genuity is slashing its estimate of BlackBerry BB10 smartphone shipments in February to just 300,000 units, a far cry from its earlier estimate of more than 1.75 million.

The equities research unit of Canaccord Financial Inc. (TSX:CF) said Tuesday that its global surveys show initial sales have been mixed for the BlackBerry Z10, with limited supply rather than overwhelming demand behind post-launch shortages at some stores.

"Our follow-up checks have indicated steady but modest sales levels," said Michael Walkley, an analyst at Canaccord.

Then yesterday, Mr. Walkley reversed course on his estimate of z10 sales upwards to 800k from his previous 300k and back towards his original 2 million unit estimate last year. Yet, Walkley still maintains a sell rating with a $9 target price for BBRY. An excerpt from explains his thinking:

We had conducted our own checks and found the estimates to be way off base. Walkley has now admitted he went too far in cutting the estimates.

"Given our store surveys indicated modest Z10 sales in the U.K. and Canada with limited initial inventory levels, we admittedly reduced our February quarter sell-in estimates too low for the first month of the Z10 launch," Walkley said in a research note today.

"With the Z10 launching in additional markets the last weeks of February, we have increased our February quarter BB10 smartphone sell-in estimate from 300K to 800K units," he said.

We think this begs the questions: "Where is Walkley is coming from?" and "Who is Walkley really writing on behalf of?" His predictions have caused major harm to BBRY shareholders by depressing the price of our shares. We suggest Mr. Walkley come clean or have Canaccord Genuity change its name to Canaccord Dis-Ingenuity.

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.

Stocks: CF, BBRY