Throwing In The Towel On My BlackBerry Shares - Part 2

| About: BlackBerry Ltd. (BBRY)
The feedback on Monday’s BlackBerry (NASDAQ:BBRY) post (see prior post “Throwing In The Towel On My BlackBerry Shares” June 24-13) has been visceral. It seems that I’ve unknowingly crossed many BlackBerry shareholders by following the ways of Legendary Investor Peter Lynch, and the passion is something to behold. I can break news about Canada’s C$180 billion investment vehicle, CPPIB, or Kevin O’Leary’s shrinking asset base, but nothing has ever generated quite the hullabaloo like selling BBRY after years and years of my unrewarded patience.

To be clear, I’ve not ditched my Q10, nor am I short BBRY. The post was a lament, which should not be taken as a criticism of those BBRY shareholders who have chosen to stick around for an eventual turnaround. It may yet happen. The post was, however, a recognition that I had allowed blind loyalty/misplaced confidence in BlackBerry management to allow me to ride BBRY down for the past few years. Despite all of the warning signs. Despite talking about those warning signs on BNN Business News Network over and over again since summer 2011.

The one thing that kept me in the stock was the promise of the Q10. I shared a bunch of examples of why the Q10 is not our Pollyanna; at least not yet. Why it is not an obvious Android killer; and why the people we’ve lost to the iPhone aren’t going to come running back in droves.

Many of my concerns about the device can and should be fixed. It is true that there is a stock app; I should have been more precise to say that the Bloomberg one that was so popular for the 9900 isn’t yet available; it combined commodities and currencies plus stocks. What I can currently download to track the BBRY quote could have been built by 12 year old programmers on a Saturday morning. Has BBRY management forgotten who pays the bills? White collar workers in finance, law, accounting and so forth; people who work in, or care about, the markets. As for the lack of a Starbucks app, it was merely a case in point.

That you can “sideload” apps from elsewhere pre-supposes that traditional white collar enterprise users know how to do this. Most don’t, and the BlackBerry introductory videos fail to actually teach you how to, either. Remember the stats about how many clocks on North American VCRs would flash ’cause people didn’t know how to set them? We are still the same gene pool.

Ask a lawyer about the hassle of the cutting and pasting with the QNX software now that the trackpad is history; it almost brings tears to the eyes of associates in the legal industry. May not matter to you, but every time the company’s QNX focus degrades the work performance of these devices, BlackBerry loses another reason that has historically kept its existing users from changing teams. As one BlackBerry staffer might say: the QNX people are now running the company and they don’t care about what “used to work.” That’s a problem, and every BlackBerry staffer who has been in Waterloo more than three years knows what I’m talking about. I doubt Mike or Jim would disagree, either.

If BlackBerry’s new team can turn the Q10 family into the device that kept 9700/9900 users happy (perhaps I should say “satisfied”) all those years, while adding some “modern day” smart phone table stakes, there may be hope for the stock beyond an eventual takeover premium.

After 5 years of fumbling, I just think that same investment dollar could be redeployed elsewhere. If they get the handset right at long last, and the guidance is fantastic for the next 3 quarters, I’d be only too happy to buy the stock back at higher prices.

But as any long-term BBRY shareholders will tell you, this week’s earnings don’t really matter. They’ll make us feel good but little more than that. It’s all about the guidance; and being able to believe the guidance and then see it play out over the next 6-12 months. And, just like the buzz around a movie, if the core 9900 users aren’t telling their friends to dump their iPhones and come back into the BlackBerry pool, I am convinced that BBRY shareholders are left to yearn for an eventual $20/share takeover, sadly, and that’s not a good enough reason to own BBRY right now relative to the other choices. Like Constellation Software (OTCPK:CNSWF), which is up 17% since the Decade of Daddy Fund “bought it” in January (see prior post “Decade of Daddy Mirror Fund Q4 report” Jan. 12-13) or Halogen Software (HGN:TSX), which has risen 26% since its recent IPO (see prior post “Halogen IPO filing gives Canadians their first chance to taste tech in far too long” Apr. 2-13).

On Seeking Alpha, the post had attracted 185 reader comments so far. Most of them were angry shareholders, and a few were very kind to try to point out some fixes to the challenges I’ve been facing with my Q10. And there have been emails, too. I appreciate the sincere feedback. Here’s a sample of the passion:

A sympathizer:

Some of the issues you identify I’ve not experienced, others are growing pains that need to be fixed (inability to cut and paste easily is a problem). Others are crazy (most obviously why they flattened the flexibility of the notification profiles, and limited apps for core market) which can be fixed but why…?

A soon-to-be former Q10er:

I hate mine with a passion after 3 weeks! What are you switching to? I’m trying to decide between the Samsung because the touch screen is big enough or iPhone with the blue tooth keyboard attachment.

Sent from my BlackBerry 10 smartphone on the Bell network.

Someone who is embarrassed for me with my application of the Peter Lynch approach to investing:

Mark,Saw the cast and do hope your investment advise is not based on such emotion rather than prudent diligence. As I read above, the issues that you brought up seems to have all been addressed. I may suggest that maybe spent a bit more time on querying minor nuances when getting any new device.

Again, saw no value in the cast and am surprised BNN actually aired it. Another colleague mentioned that they were embarrassed for you and your clients if they were watching.

Just thought I would share my thoughts.



Babs61, A fellow sad shareholder on the Seeking Alpha site:

Thanks for the article…

I do agree with some of your points, and your sentiment.
The phones and “Link” need some serious work, disappointing.

The endless comments above sort of doesn’t surprise me, this is a BBRY long camp. Say something positive, doesn’t matter how backdated and you get an endless number of people agreeing with you.

BBRY will not survive if it doesn’t sort out all these issues..

BTW dont bother with Blackberry Link. Its a pile of c**p.
I solved the problem u mentioned by dragging and dropping stuff directly into my phone on my laptop..

I am still Long…

That was me, up until a week ago. And I don’t regret it one bit.

Disclosure: I own CSU and HGN. As always, this post reflects a personal opinion and is not to be taken as investment advice or a recommendation to buy or sell securities as I’m not licensed to give such advice).

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