Blackberry (Nasdaq:BBRY) needs to go into the private equity repair shop. Sooner than later. Manic depressive stock traders just have a negative howl which will not be satiated until stock is delisted.
Sep is over. Most holders are looking at big losses. Tax loss season coming soon. There will be a classic game of chicken over the timing of an offer and the valuation that goes with it vs the compelling logic of tax loss selling.
So the propeller heads who are trying to value are looking at strong selling pressure. This zaps any buy out premium. So this six-week due diligence with a go shop clause is another way to force the stock price down and avoid any large valuation increases. But the lawyers like it real good.
Investors have no choice. You have been screwed over. Sell and join any class action lawsuits that you can find.
Technology eats its own babies.
George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @ @financialskepti
Blackberry (Nasdaq:BBRY) is probably going private. Not long ago the stock was north of $60. Today it flits around $10. Blackberry became the whipping boy that everyone loved to short. You know the hedge fund guys with the long short positions. The question becomes who to pick on now for a short.
While some investors are glad this one is going off the radar a lot of traders big and small loved using the stock as the short. It will be hard to replace the sentiment that was so strongly against Blackberry and probably justified the possible buy-out.
George Gutowski writes from a caveat emptor perspective. follow him on Twitter @financialskepti
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.
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Who will buy Research in Motion (Nasdaq:RIMM)? The conversation does not want to stop. The real question is “Why buy RIMM?” What would the strategic reasons be?
Look at the camera technology in a smart phone. It’s not really there to take cute pictures of your cat. The business case is in the scanning or optical character recognition. The smart phones will scan bar codes, QR’s and other bits of digital data resulting in products being purchased.
So imagine your charge card as a smartphone or your smartphone as a charge card. Who runs charge cards Visa, MasterCard and American Express (NYSE:AMP) for the most part. RIMM market cap has shrunk enough for the three credit card companies to swallow up RIMM. Credit card companies are a technology play. Who could benefit the most from RIMM. The other two could not catch up for five years or more.
RIMM still has the security card.
This is the only takeover that would be palatable to the two founders and co-chairman. A takeover by another technology giant would be unthinkable to them.
Disclosure: George Gutowski writes from a caveat emptor perspective.
Image via CrunchBase
Research in Motion (Nasdaq:RIMM) says its music app is ready. Did you hear that the music app is ready. So what and who cares? RIMM is about secure messaging for corporate environments and then some stuff for the CIA and governments that RIMM will not talk about. But we think it pays well. If you need music from your smart phone you have already made a decision and it wasn’t Blackberry. If you are a spy with the CIA or someone lie that you do not have an official Facebook page or even a twitter account.
RIMM needed to throw something out there to shut some critics up. It will not become a major money-maker.
There is still the need for strong security. The world has hackers hiding out in the bandwidth. Play the security card and make me feel safe. Music apps not important.
Disclosure: George Gutowski writes from a caveat emptor perspective. It’s all about the black swans.
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Lenovo (HKSE:0992) or pink sheets if you dare (LNVGY) announced nice results based on selling more laptops in China and into the emerging markets. Mature markets as they call the US of A were stagnant. They made a big point in declaring they are now the No #3 worldwide leader in laptops.
Not much ink on tablets or smart phones. Sure the Chinese and emerging markets will provide some growth but what about the new gizmo’s. Many believe we are in a post PC world. Mobility is the key. Laptops will become more commoditized over time.
By not discussing Tablets to any great extent management is signalling their blind spot. The Chinese consumer is internet savvy and forward thinking.
Will non-Chinese brands recapture the domestic China market? This is a high-profile product with a lot of nationalistic pride.
Disclosure; George Gutowski writes from a caveat emptor perspective. I hold no positions in stocks mentioned in this post. I have no plans to initiate new positions within the next 72 hours.
Image via CrunchBase
Dell (DELL) terminated its Crackberry err Blackberry arrangement with Research in Motion (RIMM). Dell is promoting the “Dell Venue Pro” so it would be reasonable for Dell it eat its own dog food and switch 25,000 captive users over. The costs become internal Dell costs and not a third-party cost. RIMM is expected to survive the loss of 25,000 customers.
Dell used their CFO Brian Gladden to make a marketing announcement claiming that they are lowering costs. Now that this info is baked into Dell stock no one is buying or selling based on this tidbit. Come on Brian that was reaching too far.
RIM’s SVP Marketing Mark Guibert made the comment that Dell is looking for some cheap publicity. Also he disputed the cost analysis.
OK so now that the appropriate corporate bitch slaps have been exchanged, another smart phone duel is about to break out. Brian Gladden may have painted himself in a financial corner on the cost comment. Conference calls will be interested. Wonder which sell side analyst will have the balls to ask for some more color on that comment?
Disclosure: George Gutowski writes from a caveat emptor perspective. I hold no positions in stocks mentioned in this post.