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  • BlackBerry Moves To The Sidelines 6 comments
    Feb 25, 2014 10:43 AM | about stocks: BBRY

    It only makes sense that everyone is talking about Facebook's (NASDAQ:FB) $19 billion deal to purchase WhatsApp, as well as its potential to change the way people talk to one another. As such, people are already starting to evaluate other current means of communication, such as BlackBerry Messenger (BBM). The similarities between WhatsApp and BBM have some people hoping that BlackBerry's BBM will be appreciated more, thus, increasing BBRY's value. However, all analysts are recommending HOLD BBRY at this point, with the concern that this billion dollar deal will actually hurt BBRY in the long run.

    Currently there is a consensus to HOLD BBRY. Both 5-star analyst Mark McKenchie and 2 ½-star analyst Zachary Amsel of Evercore recommend HOLD BBRY in light of this potentially revolutionary communications deal. Because BBM and WhatsApp function in very similar ways, some people feel that BlackBerry will experience a similar surge in interest because of WhatsApp's popularity. However, Zachary and Mark argue that "the fact that Facebook is buying WhatsApp will likely mean that Facebook users will automatically adopt WhatsApp rather than looking elsewhere for a messaging service, like, perhaps, BBM."

    WhatsApp is the fastest growing communications and social media App, whereas BBM only has 80 million monthly active users and shows no signs of growing. And while "BBRY expects to see 'reasonably good revenue' from its BBM messaging service in the 2016 fiscal year, it has said it sees 'negligible revenue' from service activation fees, which are declining in the mid-single digits quarter over quarter."

    While Zachary Amsel is ranked 1199 out of 2411 analysts and has a 50% success rate of recommendations, fellow Evercore analyst Mark McKechnie is ranked much higher, 17 out of 2411 analysts with a 65% success rate of recommended stocks.

    One and a half starred analyst Peter Misek of Jefferies also agrees with a HOLD BBRY rating. Peter pointed out that, "WhatsApp was bought for ~$42/user, which is above their BlackBerry SOTP base-case valuation estimate for BBM of $30/user. However, he believes WhatsApp's scale (450M users vs. 40M iOS/Android BBM users) and network effects warrant a higher valuation. Misek also said Rakuten's acquisition of Viber for ~$9/user (105M users) should also be taking into consideration." Peter is ranked 1710 out of 2411 analysts and has a 51% success rate of recommended stocks.

    The deal between Facebook and WhatsApp isn't even complete and BlackBerry has already been solidified as a HOLD by a wide spectrum of analysts. Who do you trust for financial advice?

    Stocks: BBRY
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Comments (6)
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  • LTI0723
    , contributor
    Comments (826) | Send Message
     
    "WhatsApp is the fastest growing communications and social media App, whereas BBM only has 80 million monthly active users and shows no signs of growing. "

     

    No information to back up that BBM shows no signs of growing so I'm taking that part with a grain of salt. I don't expect any real information until the next BBRY CC and at that time I think we will see signs of growth.
    25 Feb 2014, 11:38 AM Reply Like
  • caligrowthresearch
    , contributor
    Comments (138) | Send Message
     
    Not growing? Crap! It's growing faster every Day!
    25 Feb 2014, 12:12 PM Reply Like
  • Dmitry Kovalchuk
    , contributor
    Comments (402) | Send Message
     
    John Chen said today, that BBM has 85 million active users.
    25 Feb 2014, 02:15 PM Reply Like
  • KIA Investment Research
    , contributor
    Comments (10852) | Send Message
     
    mikedns, wouldn't most of those 85 million BBM users be the 80 million BlackBerry loyalists still on BB7 devices that didn't upgrade to BB10?
    25 Feb 2014, 07:24 PM Reply Like
  • LTI0723
    , contributor
    Comments (826) | Send Message
     
    Not likely if you consider all the ios and android downloads. Only Mr. Chen has the facts, everyone else is guessing. We won't know until next CC.
    26 Feb 2014, 09:08 AM Reply Like
  • KIA Investment Research
    , contributor
    Comments (10852) | Send Message
     
    Yeah, but ...

     

    We'll wait and see ;-)
    26 Feb 2014, 07:31 PM Reply Like
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