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Vishal Doshi
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An active software engineer, intrigued by markets and finance. I manage investments for family and friends.
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The Idea
  • How Many $BBRY Users Are Switching To IOS/Android? 3 comments
    Mar 6, 2013 2:19 AM | about stocks: BBRY

    So it seems 1/3 of the users signing up for the Z10 are from non-BBRY platforms. Ok.

    Positive interpretation:

    $BBRY is able to convince users of competing platforms that they have a better offering and it's worth switching. Good, new revenue from new users. Proof the new business model (device sales only) could work.

    Negative interpretation:

    $BBRY is not able to retain it's existing clientele. The conversion rate among the much touted 80 million existing $BBRY users is very low.

    So what happens now? What will the existing 80 million do?

    1. Nothing - keep using BB7 and below

    Not bad for $BBRY in the longer term - since this translates to BIS revenues. And there's hope that a future product could meet this demand. (Perhaps the Q10, but I really doubt it).

    2. Switch to a new platform - like iOS or Android

    Very, very bad... loose revenue from BB plan and also loose potential sale of Z10. If BBRY can't convince 'em now...

    3. What am I not thinking about? :)

    Hence, the interesting question to me is: How many people are switching away from $BBRY as opposed to waiting, now that they've seen the Z10 / Q10...

    Position

    I still see no +ve signs for $BBRY. From the time I last Instablogged about $BBRY - it's been going down about 1% a day. (13.20 => 12.60). I expect it will keep falling...

    Disclosure: I am short BBRY.

    Stocks: BBRY
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  • oneinfiniteloop
    , contributor
    Comments (663) | Send Message
     
    We already know the market share of $BBRY from last quarter and the number of current subscribers ~79 million. So, given that $BBRY is saying that almost 1/2 or those buying Z10 are converting over from other platforms should give some hope. The results on March 28th should provide accurate picture of how many of those ~79 million customers was $BBRY able to hold and how many of those switched from BB7 to BB10 and how many new customers have bought into fresh BB7 contracts. Also, net/net total increase (if any) from the current ~79 million.
    8 Mar 2013, 01:02 PM Reply Like
  • Vishal Doshi
    , contributor
    Comments (6) | Send Message
     
    Author’s reply » Yep, Mar 28 is going to be very interesting:

     

    I think:

     

    1) If the numbers are bad - $BBRY will go down in flames. It's game over. 30% chance?

     

    2) If the numbers are good - it's only a temporary respite, it's not enough to signal a new trend - 70% chance?

     

    I'm still holding my short, hope I can stay afloat even if the numbers are good and there's a big pop to say 18/19.

     

    It's looking a little bleak; what do you think? Any opinion on the Lenovo rumours?
    12 Mar 2013, 08:33 AM Reply Like
  • oneinfiniteloop
    , contributor
    Comments (663) | Send Message
     
    Both George K. and Michael C. have talked about the Lenovo angle. In my opinion it is more likely that $BBRY may signup some licensing deal with both Lenovo and Sony - I am not certain in what shape it will be realized though.

     

    One thing is certain, in the near term (just before the results) the sentiment on this stock will be largely driven by how sales number start clocking on AT&T (and soon to be announced release date on Verizon). If those numbers start showing up to be positive (which I believe they will) then it is very likely that $BBRY will jump to $18 very quickly before the results (regaining its lost ground).

     

    In yesterday's action, I saw that both the short term speculators and shorts were throwing their stock at the bid price and $BBRY still managed to climb to $14.90. The volume off the gate was very high as well - both being very positive indicators - this seems to be buy on the news euphoria at this time. If March 28th results and future guidance is solid then a lot of them might hold on to their stocks rather than selling them and this could result in some short cover rally which could propel the stock between $20 to $25 post results. (I am purely basing this on the FCF of $3B+ and a multiplier of ~8). The current put/call premiums are very high indicating that the markets are covering themselves on both sides of the equation - this will provide further legs to the overall rally (if it does come to pass).
    12 Mar 2013, 09:32 AM Reply Like
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