BlackBerry (Nasdaq:BBRY) is about to announce earnings. Ponder this Bear Case Scenario.
Blackberry once the dominant leading brand in the smart phone business is now teetering on the edge of extinction. Staffs are being let go by the hundreds and thousands. Cost cutting is mission critical. Blackberry needs to put some revenue and marketing wins on the board and get the market believing they can come up with something compelling.
Blackberry is viewed through the prism of Apple and Samsung which are huge consumer product success stories. Investors who are looking for consumer product success from BlackBerry are misguided and will be disappointed. some stock is held by delusional holders who have not yet completed the cycle of despair.
BlackBerry holds thousands of patents which will eventually be commercialized. Unfortunately no one can give guidance on when this revenue stream may start and to what extent.
BlackBerry will probably become a specialized niche offering. If they can produce positive cash flow they will be able to reward shareholders proportionally. They just will not be the stars and darlings of the hyper behavioural crowd that chases stories and headlines.
This may be the ultimate value play. Buy ugly sell pretty. Looks ugly right now doesn’t it.
George Gutowski writes from a caveat emptor perspective.