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oneinfiniteloop

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  • BlackBerry Short-Sellers Finally Begin To Cover [View article]
    I think Prem Watsa also bought a couple million of $RIM in the ~$65 range.
    Jul 27 03:01 PM | 1 Like Like |Link to Comment
  • BlackBerry Short-Sellers Finally Begin To Cover [View article]
    @rtmunro, if we had a crystal ball which told us where the stock would be tomorrow I am sure you and I would be having a different discussion here. You have been presenting the bear argument and I sincerely appreciate your perspective; my opinion differs in that I believe that the analyst are giving $BBRY the raw end of the stick and current stock of investors in $BBRY are traders who are in it to make a quick buck and move on before you can say the word "trade." Is there something wrong with that? I don't think so, but, momentum trading is not my investment strategy - and I don't espouse to it.

    I can go into quite a bit of detail about the technical merits of the BB10 platform and also about the business opportunities it has with the new BB10, BES 10, BBM, Consumer and Enterprise Cloud, M2M, etc. But I know you care a rats "bottoms" about that.

    Having said all that - what matters is here and now - as of today $BBRY is taking the beating of its lifetime and in a way is paying its dues for guarding its secure fortress. There is sound technical merit to why even though they had the app store way before Apple or Android they didn't open it to other app developers - but strategically they should have had something like Blackberry Balance feature as part of the app store way, way back. There is also sound technical merit on why they didn't offer full touch screen - as you know full touch consumes quite a bit of battery power. IMO, $BBRY has learnt from this experience - in that most people don't really care about battery or all the technicalities of ensuring security, radio usage is safe and efficient - they want more CPUs, more memory, more apps they want pretty UI, they want oodles of bandwidth - that's it.

    AFAIK, there are only two companies that set themselves out with a clear simple objective that is going to drive their comeback - Apple with its "Think Different" and Blackberry with its "Keep Moving" - we know how it unfolded with Apple. Let's see how it works out with Blackberry.
    Jul 27 01:37 PM | 5 Likes Like |Link to Comment
  • BlackBerry Short-Sellers Finally Begin To Cover [View article]
    Well, I play by the "Rich Barber" principle - which is to keep accumulating. Fundamentally speaking, I don't think there is anything wrong with Blackberry as such. Current market behavior is such that they want instant gratification - the principle of buy and hold is something of a relic - fortunately or unfortunately I am of that old school.

    When I bought into Blackberry it was very clear to me that it is not a quick turnaround story. Blackberry is a big ship and they have built an entire new platform that targets both the enterprise and consumer space. All it takes is a couple of good wins and the entire rhythm of conversation will change. I believe that Blackberry has learnt its lessons well - it needs this fiscal year to tidy the loose ends; until then I am just going to sit back. If the ship sinks so be it - I am going down with it. If that does happen then you can bet that I will have a nice big loss to nurse my way through :)
    Jul 26 10:04 PM | 6 Likes Like |Link to Comment
  • BlackBerry Short-Sellers Finally Begin To Cover [View article]
    The short interest is still higher than the Q4 2013 results (March 28th, 2013) - which means probably about 60 million+ shorts are holding on to their positions which they had picked up when $BBRY was in the the $18 range and they may very well hold on to their short position for another 3 to 6 months until circumstances prove them wrong.

    Recently $GS has also done a u-turn on $BBRY's future.

    Disclosure: I am long $BBRY and haven't and will not sell a single share. I continue to accumulate as this recent drop presents further opportunities.
    Jul 26 01:20 PM | 10 Likes Like |Link to Comment
  • Blackberry - Is Current Perception A Reality? [View instapost]
    "I imagine they weren't as bad as people think, and that the large drop in overall GM% was due to the large drop in service revenue with its huge margins."

    I guess you are referring to the drop in services revenue due to Venezuela effect.

    "...going to be ambitious with using their international network for new services. BBM has SO much potential, if they can bring BBM money cross platform..."

    I think since BBM was so popular with folks who have used Blackberry before very likely that those folks will come back to BBM. Initially the popularity will be outside US (or that is what I think will be the case) in Indonesia/South East Asia, UK, African countries, Canada. Hopefully as the word spreads about the clarity of voice in BBM Voice, Video, Screen share (as it goes multi platform) people will come back to BBM. Currently, I spend $30 on texting, once BBM becomes cross platform - I will switch over to BBM - the $30 I get to save as a result will be like getting one data plan for free!
    Jul 22 09:59 AM | Likes Like |Link to Comment
  • Blackberry - Is Current Perception A Reality? [View instapost]
    The cost of revenue (a.k.a., COGS) between this and the last quarter jumped by a whopping ~$426 million dollars - can somebody please explain in layman terms what that includes? I checked here: http://bit.ly/15a096l but all I can understand from this in simple terms is the amount Blackberry spent to produce goods. In case of Blackberry it is not just the hardware but it is also producing software (BES, BBM, etc.) so does this line item include that. If you check, that level of COGS was recorded in Q3 2013 when Blackberry was cooking BB10.

    Compared to last quarter - between COGS, SG&A (additional marketing costs), one time licensing fee and the Venezuela effect approximately 426 + 150 + 155 + 72 = $803 million were chewed up = ~$1.55 of earnings!

    Is this what Thorsten was alluding to in Q4, 2013 when he said that he expected 50% increase in investment toward SG&A and other items?
    Jul 21 07:20 PM | Likes Like |Link to Comment
  • Blackberry - Is Current Perception A Reality? [View instapost]
    @fdmicmul, thanks for sharing those details. I was extrapolating that ASP based on the fact that toward the end of Q4 2013 there was an order placed for 1 million devices by one of Blackberry's partners. The amount of $542 million was showing up as deferred revenue since Q4 2013 - I could very well be wrong about that in that if you look at google finance under balance sheet the amount shows up as $555 million in Q3 2013 which got reduced to $542 million in Q4 2013.

    One silver lining to this is that Blackberry has reduced this line item by $196 million this quarter. Second, I am not a financial analyst so if you are well versed at reading financial statements can you please tell me if this deferred revenue is like capital sitting with Blackberry that it is using (for free) - if that is the case then isn't it a good deal given that the partner(s) is(are) giving money before actually taking the delivery?

    IMO, Z10s not selling is not good for Blackberry. After installing a leaked version of 10.2 on my Z10 I can tell you that the overall UI experience is a lot, lot better than say the 10.0 or the 10.1! Blackberry needs to move quickly on the UI side and providing a way to install Jelly Bean Android apps directly from my Z10 device. The Android apps load quicker on the 10.2 - Netflix is also loading rather quickly - but at this time when I click on play it doesn't work. I expect they will fix that soon. BBM Channel Beta is also not available on my leaked 10.2 and I haven't been able to contribute to my "One Infinite Loop" channel for over a week now :(
    Jul 21 06:51 PM | Likes Like |Link to Comment
  • Blackberry - Is Current Perception A Reality? [View instapost]
    It is Q1 2014 (fiscal year) - http://mwne.ws/18wUzj5
    Jul 21 04:13 PM | Likes Like |Link to Comment
  • Which U.S. Activist Is Best To Make BlackBerry Lemons Into Lemonade? [View article]
    @wiesje, thanks for jotting down such a detailed response.

    I missed mentioned the following on my last response - Prem Watsa continues to be bullish about $BBRY as a company, he had also mentioned that (and I take the liberty of paraphrasing it here) knowing what he knows about the company now he is aware where the company will be in next 2 to 3 years and he said in the interim it is just noise, so I think, what he is saying is that as the time goes by the Signal to Noise ratio is going to improve as the time goes by. He has set a 5% market share goal on the hardware business of $BBRY so definitely there is quite a bit cooking on the software and services side - which we have all guessed what it is.

    Having said all this, I will say this, it will be a shame if this company ends up getting sold in parts or as a whole.
    Jul 21 11:01 AM | Likes Like |Link to Comment
  • BlackBerry Can Engage In Value Creation Through Preservation [View article]
    @contrarianwise, if I remember it correctly, he made that statement on an interview with CNBC during the March quarter. If I find the link I will include it here later.
    Jul 21 03:28 AM | Likes Like |Link to Comment
  • Which U.S. Activist Is Best To Make BlackBerry Lemons Into Lemonade? [View article]
    @wiesje, his overall hedge against the overall market is much, much larger than his position on Blackberry; second, Fairfax has been returning an average growth of 22%+ year over year for last 26+ years - even Warren Buffett doesn't come close to that record.

    Prem Watsa is an intelligent and smart person - he is very well versed with the ins and outs of business, finance and markets (to top that he also has a solid grasp of engineering) - he had mentioned a while back that even if Blackberry maintains a 5% share of the world market it should do just fine. There are many facets to Blackberry which are still unfolding. The company has good amount of cash - which is not dwindling but growing at an even pace.
    Jul 21 02:36 AM | 2 Likes Like |Link to Comment
  • Which U.S. Activist Is Best To Make BlackBerry Lemons Into Lemonade? [View article]
    @hz06, I agree with you, as a retail investor we have no control on what these activist investors can or cannot do - essentially we are in this for a ride.

    IMO, $BBRY is going to be in the penalty house for another 2 to 3 quarters.
    Jul 20 05:03 PM | Likes Like |Link to Comment
  • Which U.S. Activist Is Best To Make BlackBerry Lemons Into Lemonade? [View article]
    @MPF94025 - the question that you asked is a bit tricky to answer in that (based on my understanding of things) what would happen is that the market makers would end up with a large position on their hands (given that they are chartered to maintain fluidity in the market) - this means now some of those shorts (those that are still holding on) are now betting against these market makers - and you generally know what the outcome is of such engagements. This is what very likely happened during the earnings call where in a number of short term traders (and some long term investors) dumped their stock - by the law of supply and demand when the supply goes up and demand goes down then usually the price drops. In my opinion if shorts had indeed closed their position in droves along with longs dumping their positions we would have seen much better outcome in terms of the stock price. In short, on a second thought - revising my stance from the previous post, very likely the short position hasn't dropped all that much - we will get the results of current short interest soon.

    I did mention in my previous post that I was of the opinion that the short position might have dropped substantially but I am having second thoughts about that as you can see from my current post. I apologize for waffling on this one - the dynamics of this is such that only market makers know the real outcome.
    Jul 20 04:44 PM | Likes Like |Link to Comment
  • BlackBerry Can Engage In Value Creation Through Preservation [View article]
    While reading responses from some of the folks who have been laying out bear arguments - I happen to glean over Prem's writings and I found something that very much resonates with Blackberry. This was the statement made by Prem Watsa when some of the prominent hedge funds conducted a meticulous bear raid on Fairfax Financial:

    =====
    Attacked by hedge fund shorts including Jim Chanos, Whitney Tilson etc. Stock price dropped 40% to Cdn$57.

    Regarding to shorts, Prem said, "Our one major worry, was that people would no longer deal with us. It never used to be that way, but now everybody looks at the stock price to get a sense in confidence in a company."
    =====

    Reading the above comment it looks like almost a Deja Vu moment for Prem Watsa :) Anyway, Blackberry has to bootstrap itself out of this and IMO it has all the right ingredients to do so.
    Jul 18 01:21 AM | 3 Likes Like |Link to Comment
  • BlackBerry Can Engage In Value Creation Through Preservation [View article]
    A well written article Money Investor - shows that you have a good handle on reading financial statements. Here are my 2 cents on this:

    1. Rate at which BB7 units will be phased out - I think BB7 units will continue to sell well into 2015 (simply because of the lower price point) and the fact that it is selling relatively well in markets outside US. BB7 will help to cater to lower end range and will provide services revenue base. IMO, replacing existing paying subscribers at 12% to 20% rate per year with BB10 is good one because this probably the rate at which the existing BB7 contracts are expiring. The drop in subscriber attrition will take a quarter or two to level out.

    2. Burn in cash position - I think Blackberry would start investing their cash only after BES 10 and Secure Work Space revenue stream start flowing in at a regular clip (over next 2 or so quarters) and they have large corporate and government contracts in the bag (which give them good amount of continued revenue stream). All said and done quarter over quarter we should see a steady growth in cash @ of approx. $100 to $200 million per quarter. Heins has already stated and I paraphrase - "going forward, our financial models are setup to continue to grow our cash position quarter over quarter."

    3. Blackberry hasn't as yet introduced its consumer and enterprise facing "cloud" offering - this, I believe, will be something that enterprises (small and medium) might gravitate towards. Their secure network is another piece of "real estate" that is yet to be completely lit up.

    4. The BB10 licensing deal should come about in 2 quarters or so.
    Jul 18 01:20 AM | 2 Likes Like |Link to Comment
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