BB - BlackBerry

[alertmeipp]

I started a smallish position on this.

Their product line was a mess, seems too much on retaining customers rather than expanding.

 

Seems they are getting it finally?? or they might need some non-Sybase executives to shake a few things.

 

Will see how next few quarters go.

 

Trading at around 3.5x vs peer average of 8x.  Very reasonable assuming QNX will be to growth mode. They said Cylance is all caught up in term of functionalities to others such as Crowdstrikes. The pie is getting larger daily with more competitors. They seems to have some edges but I think a buyout might be the best route for shareholders to make money.

[no_free_lunch]

I haven't seen too many busted tech companies turn around.  I know Apple did and you could argue microsoft did but they always had these large core, dedicated customer bases to fall back on.  I don't see it with blackberry.

 

[alertmeipp]

Sybase.  :)

 

Blackberry actually was using some of the previous relationship to build its "new" businesses.

 

The turnaround is more or less completed in a sense, the problem is they are not showing the growth rate the street wants (below average 10-15%)

 

Will see how 2021 goes.

 

 

[Santayana]

What happened today?  Up 40% if you include the after hours.

[deleuze68]

WSB

[cameronfen]

What happened today?  Up 40% if you include the after hours.

 

This I think: https://news.bloomberglaw.com/tech-and-telecom-law/blackberry-and-facebook-are-in-process-of-global-settlement

 

Maybe leaked out early. 

[petec]

How do we merge this thread with the original (which is under the old ticker, BBRY).

[alertmeipp]

The case is now settled but no details on the terms.

I guess we will see the settlement details in upcoming SEC filings by looking at cash balance and licensing income. Doubt it's  anywhere near 2

 

BB still trading at below peers multiples after the run up and obviously, way below CRWD's and rightly so. Sold some on the run up, will probably build it back up next couple weeks.

 

It's a viable player in a few mega trends. Home run if things play out type stock.

[Xerxes]

AWS boss on Blackberry investment.

Short clip from last month.

 

[Ballinvarosig Investors]

Insiders dumping shares - https://www.bloomberg.com/news/articles/2021-01-22/blackberry-insiders-unload-shares-amid-biggest-rally-in-21-years

 

Probably too much to hope that Prem is unloading his shares.

[petec]

Interested to know what people think of my logic here. This was back of the envelope and very rough.

 

FY20 revenue guide $950m with a 70% GM and essentially breakeven net. Post conversion they have around 620m shares out so at $12 they have a market cap of $7.5bn. Assuming 25x earnings:

- At the current price they need $500m in additional revenue assuming a 70% gross margin, fixed operating costs, and 20% tax.

- To be a triple they need $2bn in additional revenue assuming a little operating cost expansion.

- To be a 10-bagger they need $6bn of revenue assuming a little more operating cost expansion.

 

$950m of revenue splits roughly 220 license revenue and $730 of software revenue. While there is potential for linear growth from licenses, cross-selling UES to UEM clients, and Radar, the potential for exponential growth comes from QNX and IVY in cars.

 

As cars get more connected and automated, risks rise, making QNX's security and stability much more valuable. If Blackberry can translate this into more $ per car they win. This could happen by charging a higher price on manufacture, which is happening although the extent is unclear, or by moving to a recurring revenue model. I think recurring revenue is the big win. Unconnected cars do not need updates but connected cars do. Assessing whether this, or the introduction of IVY, will allow Blackberry to charge a recurring fee is the key to the stock price. One concern I have here is that as I understand it Ford has selected QNX as the whole car OS on its entire fleet at a rumoured $20 per car, but this does not seem to be recurring.

 

New QNX wins come at mid-high single digit $/car for applications and possibly high teens for domain controllers/whole car OS. Revenue per car could be higher in the long run with IVY although that product doesn't exist yet. The TAM is large: 2bn motor vehicles are on the road and 90m are made a year, although most of those are not connected yet. For the stock to move they've got to do >>$5 per car in >>100m cars. The attached table shows sensitivities. As you move from left to right you see the power of moving from a one-time fee on annual production to a subscription model.

 

 

Untitled_picture.emf

[petec]

Also, really interested to know who people think will compete with Blackberry in:

- providing a secure OS/anti-threat system for connected cars.

- providing an analytics and app ecosystem for manufacturers and developers.

 

It seems to me that the big tech players are more focussed on developing their own self-driving software than on helping legacy manufacturers move forward and I wonder if Blackberry is the leader in the latter niche. But I am early in the learning curve and would appreciate opinions.

[Castanza]

Up 50%

 

For those of you holding this. Does this throw the value proposition out the window?

[StubbleJumper]

I was having trouble to do the math to justify a $4 billion market-cap and now it's $12 billion.

 

 

SJ

[Ballinvarosig Investors]

I was having trouble to do the math to justify a $4 billion market-cap and now it's $12 billion.

 

 

SJ

I think the migration of Blackberry to a SaaS company is probably not entirely understood. Blackberry is probably a work in progress in that regard, but it's still a different beast from the cell phone company that it used to be (gross margins are much higher, revenue is more recurring/sticky). Looking across the industry, it should command a premium. At the same time the premium here has gotten detached from reality. Citrix is in a very similar domain to Blackberry, except it's a far, far better business with much high revenue (3.5x Blackberry), higher cash flow, it's actually growing, and has a huge share buyback. It's a comparative bargain at $16b compared to Blackberry.

 

I would be absolutely shocked when we revisit Blackberry and Citrix at the end of this year that Citrix doesn't out-perform Blackberry.

[A_Hamilton]

Come on Prem...where is the SC13D/A saying you've unloaded the common FFH owns and have converted the debentures into common...

[Viking]

Selling Blackberry right now (if possible) makes so much sense:

1.) get an very attractive price while it is being offered by Mr Market

- likely will not stay this high; time value of money

2.) lock in a massive realized gain at perfect time

- grow insurance subs in hard market

- buy back a meaningful amount of stock when price is cheap (possibly crazy cheap)

- buy a chunk of Allied World

- pay down some debt taken on over past year

3.) bolster reputation of Fairfax equity decisions

- BBY has been considered one of Fairfax’s big errors of past 7 years; this narrative (on this specific decision) would change overnight.

 

Why would Fairfax not sell down position?

1.) too illiquid to move their entire stake without impacting price in major way

2.) no desire to sell partial stake and risk losing control of company

3.) belief market price is still below intrinsic value of company

4.) commitment to Chen to not sell position until rebuild is complete in a couple more years

5.) priority for Fairfax to champion / support / grow Canadian based companies. Selling position to simply make a big financial gain is not of interest.

[TwoCitiesCapital]

Selling Blackberry right now (if possible) makes so much sense:

1.) get an very attractive price while it is being offered by Mr Market

- likely will not stay this high; time value of money

2.) lock in a massive realized gain at perfect time

- grow insurance subs in hard market

- buy back a meaningful amount of stock when price is cheap (possibly crazy cheap)

- buy a chunk of Allied World

- pay down some debt taken on over past year

3.) bolster reputation of Fairfax equity decisions

- BBY has been considered one of Fairfax’s big errors of past 7 years; this narrative (on this specific decision) would change overnight.

 

Why would Fairfax not sell down position?

1.) too illiquid to move their entire stake without impacting price in major way

2.) no desire to sell partial stake and risk losing control of company

3.) belief market price is still below intrinsic value of company

4.) commitment to Chen to not sell position until rebuild is complete in a couple more years

5.) priority for Fairfax to champion / support / grow Canadian based companies. Selling position to simply make a big financial gain is not of interest.

 

I would hope his commitment to Chen doesn't outweigh his commitment to his own shareholders. Prem is being given a fantastic opportunity here - I do not know what they envision Blackberry's end sate valuation being, but I haven't heard ANYONE say $20+ per shares since they gave up the handset business.

 

I can forgive him if he doesn't sell, but really really hope he's looking at this as opportunity to unwind a long-term position at favorable costs. If he does that, I wouldn't even be upset if he buys it back when it drops back down to $7.

[A_Hamilton]

Selling Blackberry right now (if possible) makes so much sense:

1.) get an very attractive price while it is being offered by Mr Market

- likely will not stay this high; time value of money

2.) lock in a massive realized gain at perfect time

- grow insurance subs in hard market

- buy back a meaningful amount of stock when price is cheap (possibly crazy cheap)

- buy a chunk of Allied World

- pay down some debt taken on over past year

3.) bolster reputation of Fairfax equity decisions

- BBY has been considered one of Fairfax’s big errors of past 7 years; this narrative (on this specific decision) would change overnight.

 

Why would Fairfax not sell down position?

1.) too illiquid to move their entire stake without impacting price in major way

2.) no desire to sell partial stake and risk losing control of company

3.) belief market price is still below intrinsic value of company

4.) commitment to Chen to not sell position until rebuild is complete in a couple more years

5.) priority for Fairfax to champion / support / grow Canadian based companies. Selling position to simply make a big financial gain is not of interest.

 

Knowing that it is mid-BB's fiscal Q4 and BB came out today and said there isn't any material non-public information out there, it seems likely FFH can sell.

 

On 1, I just don't see how this is possible. 354 million shares traded today. Even if they were 10% of the volume they should have been able to exit a substantial majority of the common they control.

 

The improvement in their capital position has to be top of mind right now especially with a hard market in hand...

 

fingers crossed we get an exit here.

[StevieV]

Selling Blackberry right now (if possible) makes so much sense:

1.) get an very attractive price while it is being offered by Mr Market

- likely will not stay this high; time value of money

2.) lock in a massive realized gain at perfect time

- grow insurance subs in hard market

- buy back a meaningful amount of stock when price is cheap (possibly crazy cheap)

- buy a chunk of Allied World

- pay down some debt taken on over past year

3.) bolster reputation of Fairfax equity decisions

- BBY has been considered one of Fairfax’s big errors of past 7 years; this narrative (on this specific decision) would change overnight.

 

Why would Fairfax not sell down position?

1.) too illiquid to move their entire stake without impacting price in major way

2.) no desire to sell partial stake and risk losing control of company

3.) belief market price is still below intrinsic value of company

4.) commitment to Chen to not sell position until rebuild is complete in a couple more years

5.) priority for Fairfax to champion / support / grow Canadian based companies. Selling position to simply make a big financial gain is not of interest.

 

I would hope his commitment to Chen doesn't outweigh his commitment to his own shareholders. Prem is being given a fantastic opportunity here - I do not know what they envision Blackberry's end sate valuation being, but I haven't heard ANYONE say $20+ per shares since they gave up the handset business.

 

I can forgive him if he doesn't sell, but really really hope he's looking at this as opportunity to unwind a long-term position at favorable costs. If he does that, I wouldn't even be upset if he buys it back when it drops back down to $7.

 

The reasons not to sell range from a reach to an outright dereliction of duty.  I can forgive a mistake.  If Fairfax doesn't sell at least a partial share because of some misplaced loyalty to Chen or reason 5 - making a big financial gain is not of interest, that's another story.  I'd be looking for an exit.  This isn't a charity and BB doesn't need Fairfax to be a large shareholder to execute their turnaround anyway.

[StubbleJumper]

Selling Blackberry right now (if possible) makes so much sense:

1.) get an very attractive price while it is being offered by Mr Market

- likely will not stay this high; time value of money

2.) lock in a massive realized gain at perfect time

- grow insurance subs in hard market

- buy back a meaningful amount of stock when price is cheap (possibly crazy cheap)

- buy a chunk of Allied World

- pay down some debt taken on over past year

3.) bolster reputation of Fairfax equity decisions

- BBY has been considered one of Fairfax’s big errors of past 7 years; this narrative (on this specific decision) would change overnight.

 

Why would Fairfax not sell down position?

1.) too illiquid to move their entire stake without impacting price in major way

2.) no desire to sell partial stake and risk losing control of company

3.) belief market price is still below intrinsic value of company

4.) commitment to Chen to not sell position until rebuild is complete in a couple more years

5.) priority for Fairfax to champion / support / grow Canadian based companies. Selling position to simply make a big financial gain is not of interest.

 

Knowing that it is mid-BB's fiscal Q4 and BB came out today and said there isn't any material non-public information out there, it seems likely FFH can sell.

 

On 1, I just don't see how this is possible. 354 million shares traded today. Even if they were 10% of the volume they should have been able to exit a substantial majority of the common they control.

 

The improvement in their capital position has to be top of mind right now especially with a hard market in hand...

 

fingers crossed we get an exit here.

 

 

By some freakish circumstances, the moons and stars have all aligned.  As you note, volume today was 354m shares.  Over 3 trading days that would be a billion shares and FFH only owns 47 million.  If Prem wanted, with current volumes, he could likely unload the entire equity position over 3 trading sessions and then he could leisurely complete his required insider trade filing by Day #5 to inform the market after the fact.  That would still leave FFH holding the debs which option out to 55m shares, but it would at least be an opportunity to take 47m shares x US$18 = ~US$850m off the table.

 

 

SJ

[alertmeipp]

I have been selling. Mostly too early but not complaining at all.

Way too early than I expected and for different reason that I expected too. Thanks God :)

 

 

[bluedevil]

BB will probably double again on this news.

Just kidding, I think?

 

* * *

 

WATERLOO, ON and BEIJING, Jan. 25, 2021 /PRNewswire/ -- BlackBerry Limited (NYSE: BB; TSX: BB) today announced an expansion of its strategic partnership with Baidu, whose high-definition maps will run on the QNX® Neutrino® Real-time Operating System (RTOS) and will be mass-produced in the forthcoming GAC New Energy Aion models from the EV arm of GAC Group (Guangzhou Automobile Group Co., Ltd.).

 

The milestones build on the company's January 2018 agreement to make BlackBerry QNX's industry-leading ISO 26262 ASIL D certified operating system (OS) the foundation for Baidu's 'Apollo' autonomous driving open platform.

 

Baidu is one of the few high-definition map vendors with an Automotive SPICE® certification from TÜV Rheinland – an industry certification that addresses rigid requirements for the software development process for Tier 1 and Tier 2 automotive suppliers. With world-leading levels of data granularity, Baidu's high-definition maps provide a critical component for global automakers looking to launch next generation connected and autonomous vehicles in China.

 

Mon, January 25, 2021, 9:00 PM·3 min read

WATERLOO, ON and BEIJING, Jan. 25, 2021 /PRNewswire/ -- BlackBerry Limited (NYSE: BB; TSX: BB) today announced an expansion of its strategic partnership with Baidu, whose high-definition maps will run on the QNX® Neutrino® Real-time Operating System (RTOS) and will be mass-produced in the forthcoming GAC New Energy Aion models from the EV arm of GAC Group (Guangzhou Automobile Group Co., Ltd.).

 

The milestones build on the company's January 2018 agreement to make BlackBerry QNX's industry-leading ISO 26262 ASIL D certified operating system (OS) the foundation for Baidu's 'Apollo' autonomous driving open platform.

 

Baidu is one of the few high-definition map vendors with an Automotive SPICE® certification from TÜV Rheinland – an industry certification that addresses rigid requirements for the software development process for Tier 1 and Tier 2 automotive suppliers. With world-leading levels of data granularity, Baidu's high-definition maps provide a critical component for global automakers looking to launch next generation connected and autonomous vehicles in China.

 

The QNX Neutrino RTOS foundation for Baidu's high-definition maps is a robust real-time microkernel operating system that provides deterministic performance as well as flexibility to address the limited resources of the embedded system.

 

"With BlackBerry QNX's embedded software as its foundation, Baidu has made significant progress as part of its Apollo platform in establishing a commercial ecosystem for innovative technologies that OEMs can leverage for their next generation vehicles," said Dhiraj Handa, VP, Channel, Partners and APAC, BlackBerry Technology Solutions. "We look forward to continuing to work closely with Baidu to help develop and deploy leading edge autonomous driving and connected vehicle technologies to meet the ever increasing mission-critical and security requirements of the automotive industry."

 

"We aim to provide car manufacturers with a clear and fast path to the production of autonomous vehicles, with safety and security as the top priority. The BlackBerry QNX software performs well in functional safety, network security and reliability, while Baidu has achieved long-term development in artificial intelligence and deep learning. Together, we can help car manufacturers quickly produce safe autonomous vehicles and promote the development collaboratively of the intelligent networked automobile industry," said Wang Yunpeng, Senior Director of Technology Department of Baidu's Intelligent Driving Group.

 

As the leader in safe, secure, and reliable software for critical embedded systems, BlackBerry QNX provides OEMs and Tier 1s around the world with state-of-the-art foundational software and cybersecurity technologies. BlackBerry QNX technology is used in more than 175 million vehicles on the road in their advanced driver assistance (ADAS), digital instrument clusters, connectivity modules, hands-free, and infotainment systems.

 

[TwoCitiesCapital]

BB will probably double again on this news.

Just kidding, I think?

 

* * *

 

WATERLOO, ON and BEIJING, Jan. 25, 2021 /PRNewswire/ -- BlackBerry Limited (NYSE: BB; TSX: BB) today announced an expansion of its strategic partnership with Baidu, whose high-definition maps will run on the QNX® Neutrino® Real-time Operating System (RTOS) and will be mass-produced in the forthcoming GAC New Energy Aion models from the EV arm of GAC Group (Guangzhou Automobile Group Co., Ltd.).

 

The milestones build on the company's January 2018 agreement to make BlackBerry QNX's industry-leading ISO 26262 ASIL D certified operating system (OS) the foundation for Baidu's 'Apollo' autonomous driving open platform.

 

Baidu is one of the few high-definition map vendors with an Automotive SPICE® certification from TÜV Rheinland – an industry certification that addresses rigid requirements for the software development process for Tier 1 and Tier 2 automotive suppliers. With world-leading levels of data granularity, Baidu's high-definition maps provide a critical component for global automakers looking to launch next generation connected and autonomous vehicles in China.

 

Mon, January 25, 2021, 9:00 PM·3 min read

WATERLOO, ON and BEIJING, Jan. 25, 2021 /PRNewswire/ -- BlackBerry Limited (NYSE: BB; TSX: BB) today announced an expansion of its strategic partnership with Baidu, whose high-definition maps will run on the QNX® Neutrino® Real-time Operating System (RTOS) and will be mass-produced in the forthcoming GAC New Energy Aion models from the EV arm of GAC Group (Guangzhou Automobile Group Co., Ltd.).

 

The milestones build on the company's January 2018 agreement to make BlackBerry QNX's industry-leading ISO 26262 ASIL D certified operating system (OS) the foundation for Baidu's 'Apollo' autonomous driving open platform.

 

Baidu is one of the few high-definition map vendors with an Automotive SPICE® certification from TÜV Rheinland – an industry certification that addresses rigid requirements for the software development process for Tier 1 and Tier 2 automotive suppliers. With world-leading levels of data granularity, Baidu's high-definition maps provide a critical component for global automakers looking to launch next generation connected and autonomous vehicles in China.

 

The QNX Neutrino RTOS foundation for Baidu's high-definition maps is a robust real-time microkernel operating system that provides deterministic performance as well as flexibility to address the limited resources of the embedded system.

 

"With BlackBerry QNX's embedded software as its foundation, Baidu has made significant progress as part of its Apollo platform in establishing a commercial ecosystem for innovative technologies that OEMs can leverage for their next generation vehicles," said Dhiraj Handa, VP, Channel, Partners and APAC, BlackBerry Technology Solutions. "We look forward to continuing to work closely with Baidu to help develop and deploy leading edge autonomous driving and connected vehicle technologies to meet the ever increasing mission-critical and security requirements of the automotive industry."

 

"We aim to provide car manufacturers with a clear and fast path to the production of autonomous vehicles, with safety and security as the top priority. The BlackBerry QNX software performs well in functional safety, network security and reliability, while Baidu has achieved long-term development in artificial intelligence and deep learning. Together, we can help car manufacturers quickly produce safe autonomous vehicles and promote the development collaboratively of the intelligent networked automobile industry," said Wang Yunpeng, Senior Director of Technology Department of Baidu's Intelligent Driving Group.

 

As the leader in safe, secure, and reliable software for critical embedded systems, BlackBerry QNX provides OEMs and Tier 1s around the world with state-of-the-art foundational software and cybersecurity technologies. BlackBerry QNX technology is used in more than 175 million vehicles on the road in their advanced driver assistance (ADAS), digital instrument clusters, connectivity modules, hands-free, and infotainment systems.

 

If this doesn't take BB to $1,000 - nothing will!!!!

 

YASSSSSS!!!!!!!!!!!!!!!!!!!!!!!!11111111

[ourkid8]

You forgot the rocket ships!  :)

 

If this doesn't take BB to $1,000 - nothing will!!!!

 

YASSSSSS!!!!!!!!!!!!!!!!!!!!!!!!11111111