- BlackBerry (BBRY +2.7%) is now up 23% from where it traded going into Friday morning's FQ3 report, as shorts continue covering and investors give a thumbs-up to interim CEO John Chen's plan to shift a large chunk of the company's smartphone R&D work to Foxconn, and thereby aid the company's efforts to become profitable by FY16.
- The gains come even though many on the sell-side have urged investors to take profits. Hudson Square Research, which cut shares to Sell yesterday, is worried about plunging service revenue (-36% Y/Y in FQ3) and "an uncertain path for converting enterprise customers to a material per-user recurring fee." Bernstein, meanwhile, is worried about BlackBerry's cash burn.
- FBR has reiterated an Underperform, and thinks BlackBerry's phone business will likely "need a few quarters before showing signs of recovery." At the same time, the firm is pleased Chen provided what it considers "a candid and sobering assessment of [a] business that is in desperate need of a new and profitable direction."