BB - BlackBerry

[txlaw]

Where did this takeover rumor come from?  Seems kind of odd how it started from this Benzinga website and is now being run with by the mainstream media (sort of).

 

If BBRY got an offer for anywhere between $15 to $18, they ought to take it, especially if part of it were to come in Lenovo stock.

[muscleman]

I am interested in BBRY now. What do you think is BBM worth? We all know that What's app and WeChat are worth a lot, probably $20 bn or more. I don't think they are as secure as BBM.

How much is QNX worth?

 

[sleepydragon]

I am interested in BBRY now. What do you think is BBM worth? We all know that What's app and WeChat are worth a lot, probably $20 bn or more. I don't think they are as secure as BBM.

How much is QNX worth?

 

vxWorks, another RTOS similar to QNX, were bought by Intel in 2010 for $884m

 

In the latest Goldman Sachs' research, they calculated sum-of-parts as following:

 

BBM 728m

QNX 500

IP  2398

Cash 1835

total 4961

 

But i never found GS's research is right. Actually i think their research stink.

 

[sleepydragon]

Where did this takeover rumor come from?  Seems kind of odd how it started from this Benzinga website and is now being run with by the mainstream media (sort of).

 

If BBRY got an offer for anywhere between $15 to $18, they ought to take it, especially if part of it were to come in Lenovo stock.

 

With cloud, security etc.. becoming one of the most important growth opportunities for tech firms, i think bbry will fit well for Cisco, IBM, HP, etc.. Any of these large integrator can buy bbry. But trading on such M&A things are pure speculation, although i think fundamentally blackberry is cheap, when they stop losing money as promised by John Chen.

 

[muscleman]

I am interested in BBRY now. What do you think is BBM worth? We all know that What's app and WeChat are worth a lot, probably $20 bn or more. I don't think they are as secure as BBM.

How much is QNX worth?

 

vxWorks, another RTOS similar to QNX, were bought by Intel in 2010 for $884m

 

In the latest Goldman Sachs' research, they calculated sum-of-parts as following:

 

BBM 728m

QNX 500

IP  2398

Cash 1835

total 4961

 

But i never found GS's research is right. Actually i think their research stink.

 

This is not cheap then. The market cap is already $5.5 and there is the 1.25 bn convertible bond. So actual market cap is over $6.75 bn already.

[sleepydragon]

I am interested in BBRY now. What do you think is BBM worth? We all know that What's app and WeChat are worth a lot, probably $20 bn or more. I don't think they are as secure as BBM.

How much is QNX worth?

 

vxWorks, another RTOS similar to QNX, were bought by Intel in 2010 for $884m

 

In the latest Goldman Sachs' research, they calculated sum-of-parts as following:

 

BBM 728m

QNX 500

IP  2398

Cash 1835

total 4961

 

But i never found GS's research is right. Actually i think their research stink.

 

This is not cheap then. The market cap is already $5.5 and there is the 1.25 bn convertible bond. So actual market cap is over $6.75 bn already.

 

right. but it was cheap when I started buying at 6 :)

now I still think it's cheap because analysts are still valuing it using the above sum of parts model without realizing bbry will start making a profit and is no longer a liquidation play.

[TwoCitiesCapital]

I am interested in BBRY now. What do you think is BBM worth? We all know that What's app and WeChat are worth a lot, probably $20 bn or more. I don't think they are as secure as BBM.

How much is QNX worth?

 

vxWorks, another RTOS similar to QNX, were bought by Intel in 2010 for $884m

 

In the latest Goldman Sachs' research, they calculated sum-of-parts as following:

 

BBM 728m

QNX 500

IP  2398

Cash 1835

total 4961

 

But i never found GS's research is right. Actually i think their research stink.

 

This is not cheap then. The market cap is already $5.5 and there is the 1.25 bn convertible bond. So actual market cap is over $6.75 bn already.

 

I'm kind of torn here. I bought BBRY as an asset play way back in late 2012 at $7 when people were talking about bankruptcy for a company with no debt (at the time). I jad a large margin of safety (as evidenced by current stock price despite billions in losses from that date). Unfortunately, I tried their new BB10 phones and actually really liked the gesture based OS and keyboard (never owned or used a BB before) and figured everyone else would like it too and changed my valuation from one based on earnings as opposed to assets. I don't think there was anything wrong with this, but it certainly was less safe and my purchases at $10, $12, and $14 only justified by a successful launch which we didnt see.

 

Now I'm struggling with the same conundrum. Asset ways I think we're getting rich but there is certainly the potential for a return to earnings and a significantly higher price. I'm much happier with their current focus on software and security, IoT, and even hardware looks somewhat promising with the reception of the Passport.

 

How do you more experienced members make the switch in your investing thesis when it appears a cigar butt stock actually is on a meaningful path to earnings recovery?

[Alekbaylee]

Ontario Teachers’ Pension Plan bought almost 7.8 million shares of BlackBerry Ltd. in the third quarter, giving John Chen’s turnaround plan another vote of confidence.

 

http://business.financialpost.com/2014/11/07/blackberry-ltd-otpp-shares/?__lsa=fbc5-160b

 

[peter1234]

Financial Times:

John Chen: can he create a new generation of BlackBerry addicts?

 

http://www.ft.com/intl/cms/s/0/e38c7a6a-6591-11e4-a454-00144feabdc0.html

[peter1234]

Financial Times:

John Chen: can he create a new generation of BlackBerry addicts?

 

http://www.ft.com/intl/cms/s/0/e38c7a6a-6591-11e4-a454-00144feabdc0.html

 

He likens the experience to driving his friend’s Lamborghini. “There’s a special sequence but, once you know where all the things are, it blows your mind. Still, because of that, I would never buy a Lamborghini. We too need to make sure the learning curve is not so steep.”

[Alekbaylee]

BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) Chief Executive Officer John Chen informed that launching too many new devices is not the aim of the company instead profitability is now at the focus. The company has survived and now it is looking forward at growth, Chen said.

 

“Once we turn this company to profitability again, I will do everything I can to never lose money ever again,” Chen told Reuters in an interview a few days back. “That is definitely something I am very focused on doing.”

 

http://www.opptrends.com/2014/11/blackberry-ltd-bbry-focusing-on-profitability-more-than-launching-new-devices-chen/

[Alekbaylee]

Chen/BBRY is all over the headlines today. Here's another article bringing Lenovo to the forfront again:

http://www.theglobeandmail.com/report-on-business/blackberry-seeks-china-partnerships-as-chen-meets-lenovo-xiaomi/article21518409/

[sleepydragon]

Financial Times:

John Chen: can he create a new generation of BlackBerry addicts?

 

http://www.ft.com/intl/cms/s/0/e38c7a6a-6591-11e4-a454-00144feabdc0.html

 

He likens the experience to driving his friend’s Lamborghini. “There’s a special sequence but, once you know where all the things are, it blows your mind. Still, because of that, I would never buy a Lamborghini. We too need to make sure the learning curve is not so steep.”

 

The part about he took away his wife's samsung and get her to use Blackberry. I tried to do the same to my wife too, but failed :(

[Sportgamma]

John,

 

I came into this place looking for a short fling with Prem. But then I found you and you swept me of my feet. Actually, you had me at "enterprise".

 

http://www.forbes.com/sites/aarontilley/2014/11/13/blackberry-vies-to-be-enterprise-platform-for-all-smartphones-inks-partnerships-with-samsung-and-salesforce/?partner=yahootix

[txlaw]

A very big day today for BBRY.  John Chen has proven (to me at least) that he knows how to maximize the value of the fantastic assets that BBRY has always had. 

 

The most important announcements:

 

-BES 12 release (now supporting EMM for all of the major mobile OS providers)

-Worklife, which allows division of personal and corporate use of voice and data on mobile devices (not just Blackberries) for billing purposes

-Secusmart product roll out

-Samsung partnership to harden security of Samsung-flavored Android and to push each others' products to enterprise

-Salesforce partnership

-Brightstar (SoftBank) distribution agreement

-BBM conferencing solution that will work with BBM Protected

 

Next things I'd like to see:

 

-Partnerships with Chinese mobile device manufacturers similar to Samsung partnership

-More details on Project Ion, including possible partnerships with cloud infrastructure providers such as AMZN (who just announced some interesting AWS products that could be great for IoT)

-More detail on payments strategy

-More detail on QNX Auto strategy

-More detail on how BES 12 will start allowing for management of "medical diagnostic equipment, industrial machinery and automobiles"

 

[zenith]

thoughts on recent downgrade from MS (james Faucette) November 19, 2014

 

Market, and Management, Likely

Too Optimistic on New Product

Ramps; Downgrading to UW

We believe that the market has swung too optimistic,

assuming the company will meet its target of $350M

in new software revenue in FY16. We think the

competitive market and organizational hurdles will

likely keep BBRY’s results well below its plan.

Street expectations seem excessive. We believe that the market has largely

valued the company based on the assumption that BlackBerry will generate an

incremental $250mm in software revenue and an incremental $100mm in

messaging revenue during FY16, consistent with the targets set out by BBRY

CEO John Chen (from roughly $0 today). We estimate this implies that BBRY

will not only successfully retain roughly its entire existing enterprise subscriber

base—plus more—it will also convince that subscriber base to increase ~3x

how much it is paying BBRY today.

Hitting targets relies too much on new devices and margins. Part of

BBRY’s plan to get to EPS and cash flow breakeven results during FY16 is

through improving profitability of handset products substantially. We estimate

that the company has been selling handsets at around breakeven (or even

negative GM). While we expect that BBRY may be able to increase its GM on

new handsets to the mid-20’s range, we do not expect that BBRY will hit its

needed level of 10M units in FY16 to get to OM breakeven.

Adjusting estimates. Post-analyst day we have made adjustments to our

model. We have increased device as well as messaging revenue and lowered

service revenue. Overall, while our revenue forecasts have increased slightly

due to larger increases to device revenue than decreases in service revenue,

our EPS estimates have decreased as a result of more revenue coming from

lower margin devices vs. higher margin service. Our FY15 estimates are now

$3,797mm / ($0.21) from $3,787mm / ($0.18), and our FY16 estimates are

now $3,264mm / ($0.17) from $3,124mm / $0.09.

Downgrading to UW and setting $7 PT (previous base case). When we

initially set our EW rating in June 2014, we felt the market was too pessimistic

on the ability of the company to stem the cash burn and EPS losses. However,

we now believe that the pendulum has swung too far in the other direction,

and that the market is now too willing to give the company the benefit of the

doubt that BBRY will successfully be able to sell its new software and

messaging offerings. Our PT is approximately 1.5x TBV at the end of FY16e,

and represents ~5x EV/FY16e software and messaging revenue (typical for

other high growth software names). Current market valuations imply ~7x

EV/16e software and messaging revenue, which we view as excessive to

[kfh227]

"Hitting targets relies too much on new devices and margins."

 

I see things like this and it makes me realize that most people (even those supposedly paid to understand things) do not understand BBRY.

 

Blackberry could 100% stop making phones (that's what the devices are) and they will still make money.  But they do make them and their reasoning is that "they believe" .... if they showed their assumptions including the Nanthealth implications than I would consider their words as having some value.  To me, the MS reasoning provided shows no concrete rational.

 

I should add that I 100% think that the Passport was made to target Nanthealth customers (hospitals).  Chen pretty much said that the design of the Passport was driven by what customers were asking for.  It's consumer research enterprise market research.

 

The above are my thoughts on devices only.

 

Chen is proving to be an amazing CEO.  I'm seeing now that this guy saved Sybase for a reason.  He is focusing on what BBRY does well and is exploiting those things.

 

Not investment related but probably shows my bias under full disclosure:

And I am biased.  I have a Z10.  My wife a Z30.  And these phones are amazing.  They quit frankly are better than what Android brings to the table (no experience with Apple) unless you play games.  I don't know how anyone uses their phone primarily for communication can argue that Android is better.  And the kicker is that I can run most Android apps on my phone.

 

Long BBRY and I fully expect BBRY to breach $20 by Jan 1 2016.

[rpadebet]

"Hitting targets relies too much on new devices and margins."

 

I see things like this and it makes me realize that most people (even those supposedly paid to understand things) do not understand BBRY.

 

Blackberry could 100% stop making phones (that's what the devices are) and they will still make money.  But they do make them and their reasoning is that "they believe" .... if they showed their assumptions including the Nanthealth implications than I would consider their words as having some value.  To me, the MS reasoning provided shows no concrete rational.

 

I should add that I 100% think that the Passport was made to target Nanthealth customers (hospitals).  Chen pretty much said that the design of the Passport was driven by what customers were asking for.  It's consumer research enterprise market research.

 

The above are my thoughts on devices only.

 

Chen is proving to be an amazing CEO.  I'm seeing now that this guy saved Sybase for a reason.  He is focusing on what BBRY does well and is exploiting those things.

 

Not investment related but probably shows my bias under full disclosure:

And I am biased.  I have a Z10.  My wife a Z30.  And these phones are amazing.  They quit frankly are better than what Android brings to the table (no experience with Apple) unless you play games.  I don't know how anyone uses their phone primarily for communication can argue that Android is better.  And the kicker is that I can run most Android apps on my phone.

 

Long BBRY and I fully expect BBRY to breach $20 by Jan 1 2016.

 

Rule 1 of Predictions: Either give the target price or target date, not both :)

[sleepydragon]

thoughts on recent downgrade from MS (james Faucette) November 19, 2014

 

Market, and Management, Likely

Too Optimistic on New Product

Ramps; Downgrading to UW

We believe that the market has swung too optimistic,

assuming the company will meet its target of $350M

in new software revenue in FY16. We think the

competitive market and organizational hurdles will

likely keep BBRY’s results well below its plan.

Street expectations seem excessive. We believe that the market has largely

valued the company based on the assumption that BlackBerry will generate an

incremental $250mm in software revenue and an incremental $100mm in

messaging revenue during FY16, consistent with the targets set out by BBRY

CEO John Chen (from roughly $0 today). We estimate this implies that BBRY

will not only successfully retain roughly its entire existing enterprise subscriber

base—plus more—it will also convince that subscriber base to increase ~3x

how much it is paying BBRY today.

Hitting targets relies too much on new devices and margins. Part of

BBRY’s plan to get to EPS and cash flow breakeven results during FY16 is

through improving profitability of handset products substantially. We estimate

that the company has been selling handsets at around breakeven (or even

negative GM). While we expect that BBRY may be able to increase its GM on

new handsets to the mid-20’s range, we do not expect that BBRY will hit its

needed level of 10M units in FY16 to get to OM breakeven.

Adjusting estimates. Post-analyst day we have made adjustments to our

model. We have increased device as well as messaging revenue and lowered

service revenue. Overall, while our revenue forecasts have increased slightly

due to larger increases to device revenue than decreases in service revenue,

our EPS estimates have decreased as a result of more revenue coming from

lower margin devices vs. higher margin service. Our FY15 estimates are now

$3,797mm / ($0.21) from $3,787mm / ($0.18), and our FY16 estimates are

now $3,264mm / ($0.17) from $3,124mm / $0.09.

Downgrading to UW and setting $7 PT (previous base case). When we

initially set our EW rating in June 2014, we felt the market was too pessimistic

on the ability of the company to stem the cash burn and EPS losses. However,

we now believe that the pendulum has swung too far in the other direction,

and that the market is now too willing to give the company the benefit of the

doubt that BBRY will successfully be able to sell its new software and

messaging offerings. Our PT is approximately 1.5x TBV at the end of FY16e,

and represents ~5x EV/FY16e software and messaging revenue (typical for

other high growth software names). Current market valuations imply ~7x

EV/16e software and messaging revenue, which we view as excessive to

 

ok, this guy was a long time bear. He had sell rating ever since 2012! It's just that he started works at MS this year, people seemed to listen.

 

i agree with him bbry seems overvalued. But what is the downside? $7 is -30%. After that, bbry seems a compelling buy again, with a lot of cash, not much debt (debt are from the convert), and strong shareholders (fairfax, and the CEO who spent his own money bought stock), and valuable assets. But what is the upside for a stock like this? 2,3,10x I think. I agree that it is risky to buy the stock at this price, and it is the same risk if you short at this price. But for people like me who bought at $7, we have a free option for a stock that could go a lot higher. For people who hasn't buy yet, they can suck theirs thumbs and wait.

 

people run business, not numbers. What premium will you put on managers like Buffet, Elon Musk, Sergio Marchionne, Howard Schultz, and now John Chen etc.? Good managers pull out rabbits from their hats all the time. The analysts have no clue. They have never learned how to model that. Most of the time, they just want to get that big trade from their hedgefund clients. And it's now one month before the year-end. After that who care if the stock go up or down. that's next year.

[txlaw]

Long John Chen interview by Emily Chang of Bloomberg:

http://www.bloomberg.com/video/blackberry-ceo-john-chen-studio-1-0-12-04-Gj6paWGiT5aCPDqvMddF9A.html

 

Joint announcement on genome browser:

http://www.businesswire.com/news/home/20141208005348/en/BlackBerry-NantHealth-Launch-Breakthrough-NantOmics-Cancer-Genome

 

Forbes interview with John Chen and Patrick Soon-Shiong:

http://www.forbes.com/sites/matthewherper/2014/12/06/viewing-a-genome-on-a-blackberry-phone/

 

More Forbes:

http://www.forbes.com/sites/matthewherper/2014/12/07/here-is-what-60-minutes-didnt-tell-you-about-the-billionaire-who-is-trying-to-disrupt-cancer-care/

 

60 Minutes story on Soon-Shiong:

http://www.cbs.com/shows/60_minutes/video/UxuTMvSzEe36Th5ykQuuLnFjhmNitutP/disrupting-cancer/

 

 

[Alekbaylee]

Anyone adding before next week earning release?

Just did, taking advantage of the year end sales.

Next year should be exciting, unless the whole market crash..

[muscleman]

Anyone adding before next week earning release?

Just did, taking advantage of the year end sales.

Next year should be exciting, unless the whole market crash..

 

What's your valuation estimate on the software and services side of BBRY? I can't see any breakdowns of that in their SEC filings. It is all mixed with the phone results.

[kfh227]

Anyone adding before next week earning release?

Just did, taking advantage of the year end sales.

Next year should be exciting, unless the whole market crash..

 

I might buy some short term calls.  I think this may be the quarter that has a conference call with it that scares the life out of the shorts.

[muscleman]

https://tradeup.blackberry.com/en/ca/web/passport.html

 

How does this work? This doesn't seem to be different from selling my iphone on Amazon and buying the blackberry, right? I just tried and it offered to pay $275 to me. Selling on Amazon will only get me about $90, so that's better.

 

I haven't seen any BlackBerry phones. Is there any physical store that I can go to and take a look?

[Alekbaylee]

What's your valuation estimate on the software and services side of BBRY? I can't see any breakdowns of that in their SEC filings. It is all mixed with the phone results.

 

Have no idea. I'm just betting on the jockey on this one.

Maybe someone else can help?