Blackberry (Nasdaq:BBRY) is the markets favourite whipping boy. Everyone knows they have lost their touch. Everyone knows they are not the smart players in the smart phone market. Everyone knows to be hyper negative. Short position is about 37% of float. That’s hugely bullish. all large short positions must be ultimately covered.
Cash position is about 53% of market cap. When was the last time that a stock value of 53% cash disintegrated. Margins are still positive and revenues are growing. They do not need to beat Apple. They just need to prove steadily increasing revenues and profits and investors will discover it. Currently no debt as well.
This is like an option on technology. Not everyone needs to be a world-beating monolith. You just need to prove you can create shareholder wealth long-term. However at todays annual meeting do not expect any major announcements. They’ll play out some disgruntled investors and look down the road.
With this cash position watch for some acquisitions. Blackberry needs to change the air inside a lot of journalistic heads and get them focused on another narrative. Once the I-bankers start to smell the acquisition fees watch the buy recommendations come out.
George Gutowski writes from a caveat emptor perspective.