What do you do when you stumble and fall flat on your face? Give up? Or show some guts n grit? And try, try, try again? Must say I enjoy my debates with shorts like RJ, (as much as I must equally state their data to be unpleasant to hear); because they raise facts that have merit, and counterpoint or the longs own (valid) points. And to answer posts like that requires thought, and sober reflection on my own take, and on on the sad and sorry fall that was BlackBerry. And this blog is actually incomplete but it's some of my thoughts. Re BB, we all watched it all happen in plain sight: "The Mistake That Was Playbook". The hubris. The Storm, and all the java based lackluster non responses to the iPhone/iphone browser/ecosys threat. The 3 year too late BB10 launch. Tragically for holders of the common, a day late and a ($50 billion) dollar short. Literally. BlackBerry played violin while it's Rome (market share) burned. It was too late and the market share fall was unstoppable. (I got into it in 2013) So why are we here? Besides the obvious? Are we here to move the stock ticker a single pfennig? Anyone who thinks that is obviously incorrect, yet we all strenuously debate our povs. Are we here to hear and proclaim unflinchingly dogmatic views of either side? Where neither side learns anything? To trade barbs? I have gotten into that at times, unfortunately which was not why I came here in the first place. I've had 35 or so posts deleted around this ER, some merited and some not so much imho. Some short posters here come on and establish a run rate of 4-5000 annual comments, but never stick around long enough to actually live down that astonishingly high number. And then come out again with yet another new identity, swinging, with a zero comment record (yet sounding vaguely familiar) So for that reason I am suspicious of their motives or why they are here on this site. For me I'm here to gather information. And put out points and ideas that explain why I am long. But always looking for counterpoints to that thesis. I have learned a lot here. And yeah the shorts were correct since $140 down to $5... Often between me and RJ for example, re the BlackBerry, it's ended with me making salient points as to why BlackBerry should "recover", and you saying 'that all sounds good Mark, but I just don't see it happening.' So we agree to disagree. Two outcomes are often mentioned in binary terms: a bankruptcy or a resurgence; the diametrically opposed. One, the end of bb, two the recovery. So where's the truth lie? Is it in the middle? So if it's in the middle, what's that, some kind of never never land where BlackBerry doesn't suffer bankruptcy but continues its poor performance for a decade? Or is it a place where not only is BK talk no more, but rather where BB's respected part of mobile and enterprise? BK has not even come close to occurring, (which has been pronounced with such SURETY in 2012, 2013, and 2014, that I take wicked gleeful delight in the time elapsing, then calling out those who were SO sure of BlackBerry's demise...) So if bankruptcy, or by extension, dismantlement of BlackBerry is a valid option versus bb recovery'; (recovery meaning no dismantling of devices, fcf+, profitable, and growing again, returning value to shareholders, and if course where BK talk is conclusively ended..)
So as the repartee is, if it 'must' be framed in such dramatic binary terms, a death vs a phoenix, I am leading to latter obviously. Phoenix meaning BlackBerry never has to achieve $140 SP, but certainly a multi bagger from current levels past 2 years. Perhaps EPS of a buck or two or more, a year down the road, with a 18 PE assessment for a MC of $10B to $30B and SP $20- 50..
So, which is more likely, a defacto BK or say a penny stock, or a profitable entity that, while still a shadow of its own self, a righteous recovery of its own merit? Which of the two outcomes is there more likelihood? (I'm not here for either a BK or a non event of zero share appreciation over 3-4 years obviously). And while there has been a bumpy road, and yes to acknowledge RJ and Azaz's point, it does seem BlackBerry's "recovery" is almost always a quarter or two away ( I'm in till either 2016 or 2017, so for me its not going to be an eternal 'just one or two more quarters") For me there's a finite number of quarters, 8 to turn it around and grow, and 4 to enjoy some capital gains-- He's 4 in now since he started, and SP is up 60% since he started, so WS is not only giving him the time of day in recovery, it's validation that the recovery, is exactly that. A recovery. The infamous and now investor meme "50/50, 80/20, and now 99/1" odds of BlackBerry 'rethrival"...so GAAP or not, if they can achieve a Break Even with no BES12 or Classic or most of passports not being 'lit up' by 11-29 and not recognised as sales, what can they do when they start firing on those cylinders? BlackBerry doesn't have to get up to $ 500 billion in MC to handsomely reward shareholders, just $15-30 billion.. Re your "Instead I sort of see something like American fast-food chain Arby's, which in recent years has been up and down". I certainly hope that BlackBerry is not the Arby's of mobile...but perhaps some of that's true in the past 5 years. The difference is unparalleled security that is BlackBerry's ace in the hole. Chen is building on that, by going deeper down corridors and sectors where security is paramount like govt, and medical. And his brand new company of 200 men and women are focused on a drive for subscription based revenues, as BlackBerry continues its metamorphosis from HW caterpillar to SW butterfly. The $3 billion will see to it that time is removed as a factor. The BE of this quarter sans any real new stuff (yes passport a relative letdown, the 'splanation', being that a good part of sales were not lit up till after the quarter elapsed is somewhat weak, but of course which means we will (again); have to wait until March for clarity.) Classic goes live soon, so we should probably get half the March quarter hopefully more. Too we have the sinking in of the cessation of $800-1000M in IP, and the Vodafone deal perhaps expanding. Who knows about China or Samsung. Despite this wishy washy always and forever next quarter having a finite limit, I am optimistic for BlackBerry. For sure, by early 2017, the case will be definitively decided upon. Chen and his Praetorian will have either succeeded or failed. Either a purgatorial, walking dead zombie-esqu shadow of its self, refusing to die for decades, due to fcf trickle positive and $3 billion, a withered hand off, of cast off divisions and an Arby-esque future...
Or, an aggressive, lean company with an X and Y componetry to its dna strand, both operating with ardor and fcf positive. Y, a subscription based revenue model that sells to govt, institutions, and Enterprise. And X, an existent consumer base who also still places a high value on the other component strand of BB's DNA, that X component being devices. Selling to the world consumer and the world enterprise. With the SP taking care of itself. And that's where my bet is on. And at that time, it will no longer be a debate that can be parsed in 50 shades of grey. It WILL be binary. Either BlackBerry will have made it, or not. Now, they only need to tell their story, (read Marketing); in an inspirational way, that connects people's and emotions in a positive way, in their (current non existent) marketing. Blackberry has shown true guts and grit. Now they just have to connect with people in a meaningful way, in their marketing, and get people to identify with the valuable characteristic of not giving up when things get rough..
That and continue on the path they are on, and the share price will take care of itself in time.
Disclosure: The author is long BBRY.
Additional disclosure: Long calls and leaps as well.