BB - BlackBerry

[Guest valueInv]

Things will probably get tougher going forward. The latest QNX delay should put them right in the middle of an Iphone 5 launch. They just need to deliver on a promise, any promise, to convince people that they know what's going on in their company

 

the iphone 5 will likely be out months before bb 10 is available on a phone. remember, if it isn't delayed, the chip set rimm is waiting on won't be out until mid 2012. Android will probably have a major update by then above and beyond the well received ICS. And Nokia will have released a number of Windows Phone 7 devices worldwide, probably on a refreshed wp7 OS. Oh yeah, Windows 8 for tablets will be coming out at about the same time. Rimm bought QNX in April, 2010 as I recall.

 

There will be two revisions of IOS and one revision of the hardware by 3Q 2012. In addition, just to catch up with with Apple, they will need competitive offerings for:

- Siri

- iTunes music and video

- iCloud

- iBooks

- Other things that Apple may release between now and then including payments.

 

In addition, they will be competing against a massive app and add-on ecosystem.

 

I believe that would be impossible for RIMM to achieve.

[Guest Hester]

Rimm reveals new logo for their Blackberry phones.

 

http://plant-disease.ippc.orst.edu/showimage.aspx?RecordID=55

 

Risky move, but honest. We'll see if it pays off with consumers.

[Guest Hester]

NCAV should be over $10 per share by end of next year. That gives no value to IP. Plus, they are still profitable. I'm not saying buy, just something to think about.

[hyten1]

i am always puzzle by the low level of cash they have, during all those years of large profits were did all the cash go

 

look at aapl's cash hoard (not comparing rimm to aapl)

 

when you generate so much cash for so long and have nothing to show for on balance sheet ... what the hell

[Myth465]

news from today

 

co CEOs will be paid $1 each until further notice. Some investors wondering if that's too much.

 

LOL

[VAL9000]

i am always puzzle by the low level of cash they have, during all those years of large profits were did all the cash go

 

look at aapl's cash hoard (not comparing rimm to aapl)

 

when you generate so much cash for so long and have nothing to show for on balance sheet ... what the hell

 

I think maybe you are comparing RIMM to AAPL :), but it's a comparison that's warranted given the level of competition between these two businesses.

 

The cash answer can be seen in the cash flow statement.  Over the past 4 fiscal years they spent $6bn on investing activities - land, buildings, renovations, ip licensing agreements, lawsuits, and acquisitions.

 

Another $3bn was spent on share buybacks in the past 2 fiscal years.

 

Things are continuing to spiral downwards for these guys.  It looks like the ~$4bn on buildings and the $3bn on stock buybacks might be some of the worst investments made by these guys.  Worse even than the PlayBook.  If RIM's death spiral continues, then I don't see how the investments in buildings and property are going to maintain their value.  It's not like Waterloo has a ton of huge firms clamouring for office space.

 

I think it continues to be prudent to stay away from this investment until the company initiates a significant strategy change.  This baby is cheap by way of metrics, but management has proven to be inept allocators of capital and has shown no sign of relenting.

 

I do think RIM today has the potential to be worth more than its $7bn market cap, but the path there will start when something major changes, such as:

- Significant change of management.  Not a silver bullet as they need to get the right people, but it recognizes the need for change and that's probably enough at this point.

- Or, abandoning the hardware business.  Let someone else blow their brains out competing with HTC and Samsung on price, or Apple on design.

- Or, reducing the scope of the business (niche play).  Focus solely on government, military, and paranoid business segments.  Cut the scale and jack up the focus on security strengths.

 

Any of these changes would be extremely appealing as an investor.  RIM has significant intrinsic value, but it needs a revised business strategy to unlock it.  I don't think it makes any sense to count on seeing that value returned until a change in strategy has been recognized and communicated from the top.

[stahleyp]

I would imagine it might trade lower towards the end of the year with all the tax loss selling, too. I looked at this one a while ago, but I'm glad I didn't pull the trigger.

[DCG]

I have been following tech stocks since 1986, and this is the worst management credibility gap I can remember.

 

What about both Jerry Yang and Carol Bartz at Yahoo?

[VAL9000]

Please tell me they didn't spend $4b on "buildings" and land? that's surely a misprint? These guys are typical plain vanilla "wrong way" capital allocators. Neither of the CO CEOs knows anything about capital allocation, which Buffett says is the primary responsibility of the CEO. One guy is techie and the other guy is a salesman.

 

I mischaracterized this spending.  About half of the $4bn was spent on land, buildings, and furniture.  The other half was spent on "BlackBerry operations and other IT", which is stuff like enterprise software implementations, computers, etc and manufacturing equipment.

 

Finally it's likely a management change won't help in the long run. the CO CEOs made a series of decisions that have left Rimm way behind much faster moving competition. The Co CEOs prepared rimm for a world of constricted bandwidth and one where all people would do was text and send email to each other. So they built compression technologies and a secure private network to send messages over. It turns out people don't care about compression over their fast 3g and 4g connections, and they rely on "good enough" bolt on security that enables them send messages right over the internet.

 

Rimm did not foresee a world with abundant bandwidth and a "rich" mobile web experience where people would do lots of fancy things on the phone via browsers and applications. They did not anticipate the rise of social networks where people would spend vast amounts of time messaging each other with generic IM programs and communication clients.

 

It's really too early to tell how important the security thing is.  Android and Apple are just starting to struggle with this.  The ramifications of robust security for the consumer haven't really been acknowledged or deeply considered by that customer base, but it will come soon enough.  We're still in the ra-ra days of shiny new things when it comes to mobile.  You could say that the security implications for mobile phones today are about as important to consumers as they were when they bought PC's in 1996.  And they all bought Windows.  And now they all bitch and moan about how riddled with malware Windows is.  It's worth contemplating and it's definitely not obvious.

 

I agree with you regarding the lack of rich media capabilities on the BlackBerry platform, but RIM's BBM is proof that they executed very well on instant messaging.  This network is a key driver for sales to youth.

 

When Rimm does get new management, expect a bounce, a strategy shift either to Windows 7 or Android, and then a 2 year transition period where the stock will do go down first, then up a little, but overall do nothing for a period of a few years. They will never be the company they were.

 

We'll have to see what happens, but I don't think that it's worthwhile attaching oneself to a Hail Mary guess on what the stock is going to do in the case of a hypothetical event ;)

 

[Uccmal]

I have exited Rimm.  Mismanagement is a big factor.  As I expected subscriber growth is up but that doesn't make up for the undelivered QNX.  I have no idea whether QNX will make a difference to their offerings in a year, enough to stay competitive.  I can no longer reasonably predict their future revenue stream.

 

I have started channeling my inner Buffett again.  I am now understand fully and completely why he has always avoided tech stocks, even value plays in tech. 

 

If I look across my other significant holdings I can make a reasonable assessment of where they will be in two to three years.  This includes FFH, BAC, WFC, JPM, SSW, BBY, GE... Each of these will still be Bringing in buckets of cash in two years.  Each has its unpredictable components but the predictable sides such as dividends from holdings (GE and FFH), interest earnings (ge, ffh, and the banks), lease payments (ssw, ge), consumer moat (bby), tend to smooth out the less predictable portions. 

 

I am not sure what I think RIM should do but it wouldn't hurt if they stopped giving guidance on release dates.  They would probably benefit strongly from an outside perspective at the helm going forward.  Lazaridis could go back to R&D, and Balsillie could do something else.

 

At any rate, I have had enough of this ride.

[alertmeipp]

"You will learn a lot more from a disaster than a 10 bagger"

[nwoodman]

"You will learn a lot more from a disaster than a 10 bagger"

 

Haven't done the numbers down to the last dollar but I am writing off $200m pretax and counting.

[CONeal]

I have exited Rimm.  Mismanagement is a big factor.  As I expected subscriber growth is up but that doesn't make up for the undelivered QNX.  I have no idea whether QNX will make a difference to their offerings in a year, enough to stay competitive.  I can no longer reasonably predict their future revenue stream.

 

I have started channeling my inner Buffett again.  I am now understand fully and completely why he has always avoided tech stocks, even value plays in tech. 

 

If I look across my other significant holdings I can make a reasonable assessment of where they will be in two to three years.  This includes FFH, BAC, WFC, JPM, SSW, BBY, GE... Each of these will still be Bringing in buckets of cash in two years.  Each has its unpredictable components but the predictable sides such as dividends from holdings (GE and FFH), interest earnings (ge, ffh, and the banks), lease payments (ssw, ge), consumer moat (bby), tend to smooth out the less predictable portions. 

 

I am not sure what I think RIM should do but it wouldn't hurt if they stopped giving guidance on release dates.  They would probably benefit strongly from an outside perspective at the helm going forward.  Lazaridis could go back to R&D, and Balsillie could do something else.

 

At any rate, I have had enough of this ride.

 

Exited RIM for the same reason when they delayed QNX 2.0, that was pretty much the last straw.  Still own a couple of shares just to keep my interest as to pay attention how all of this is resolved.  Sent a message to them Friday regarding their EPS guidance and my thoughts about why they should no longer be providing it.

[Uccmal]

"You will learn a lot more from a disaster than a 10 bagger"

 

Alert, How true... Lol

[Smazz]

I have exited Rimm.  Mismanagement is a big factor.  As I expected subscriber growth is up but that doesn't make up for the undelivered QNX.  I have no idea whether QNX will make a difference to their offerings in a year, enough to stay competitive.  I can no longer reasonably predict their future revenue stream.

 

I have started channeling my inner Buffett again.  I am now understand fully and completely why he has always avoided tech stocks, even value plays in tech. 

 

If I look across my other significant holdings I can make a reasonable assessment of where they will be in two to three years.  This includes FFH, BAC, WFC, JPM, SSW, BBY, GE... Each of these will still be Bringing in buckets of cash in two years.  Each has its unpredictable components but the predictable sides such as dividends from holdings (GE and FFH), interest earnings (ge, ffh, and the banks), lease payments (ssw, ge), consumer moat (bby), tend to smooth out the less predictable portions. 

 

I am not sure what I think RIM should do but it wouldn't hurt if they stopped giving guidance on release dates.  They would probably benefit strongly from an outside perspective at the helm going forward.  Lazaridis could go back to R&D, and Balsillie could do something else.

 

At any rate, I have had enough of this ride.

 

Exited RIM for the same reason when they delayed QNX 2.0, that was pretty much the last straw.  Still own a couple of shares just to keep my interest as to pay attention how all of this is resolved.  Sent a message to them Friday regarding their EPS guidance and my thoughts about why they should no longer be providing it.

 

Agree with both of you guys. These guys are acting like they just saw the predicament they were in yesterday. I will still give these guys alot of respect for basically starting the Smartphone industry - but they are really out of touch now. Thats too bad. I would hate to be an employee today.

[S2S]

I am already missing the name calling as well as the highly creative and entertaining posts from RIMM's (former?) shareholders. :(

[CONeal]

These are some of the things I have come up with so far regarding my mistakes.  The first question I would ask myself would be if you saw so many issues why did you still invest?  Living is North Carolina Blackberry is all over the place.  Running errands, going to the movies, or heading uptown you would be hard pressed to convince me Blackberry was having a problem (without looking on the internet).  This city is probably an outlier regarding use or people just don’t feel the need to upgrade.  The people that I know that did leave Blackberry left b/c they wanted something different (most of them still liked Blackberry).  Every two years your contract is up and the cost to switch is fairly low so it’s a chance to get the latest and greatest. 

1. Management was a big part of my mistake as I felt the founders were the best people to run the company.  I was aware that they had made a big mistake in letting the market get away from them.  Thought over the summer they had come to the realization and was taking the steps necessary to get back on the right path.  Instead of operating like a fire had been lit under them, come to find out they had lost the perception of their brand and did not act like a normal technology company as far as turnaround times go.

2. In the past they could sell to companies and employees would basically do the marketing for them.  The lack of marketing and the growth of the consumer market in the states have left a large void for 1st time smartphone buyers.  Naming Jim B to CMO without any experience regarding the consumer has me scratching my head.  Any other CMO with the same results would have been fired already.  I have not seen one commercial or advertisement regarding BB7 through normal media.

3. RIM has done nothing to protect its brand image.  They do nothing to combat negative press.  This is a problem when people avoid your product b/c they think you are going out of business.  Based on Google results I can’t honestly say I would buy a phone b/c the perception is they will be out of business soon.

4. Constantly missed deadlines for new products to the market

5. Using different metrics to determine the stock was cheap.  When deadlines for new products are missed it hurt the earnings and the lack of demand/marketing did not allow for the earnings to be recouped.

6. While the subscribers are still growing in the company they are not growing at the rate of competitors.  Makes for an odd man out scenario regarding the company.

 

If anyone has anything constructive I’d like to hear it.  Since was an ass kicking for the ages I don’t want to miss anything.

 

[racemize]

These are some of the things I have come up with so far regarding my mistakes.  The first question I would ask myself would be if you saw so many issues why did you still invest?  Living is North Carolina Blackberry is all over the place.  Running errands, going to the movies, or heading uptown you would be hard pressed to convince me Blackberry was having a problem (without looking on the internet).  This city is probably an outlier regarding use or people just don’t feel the need to upgrade.  The people that I know that did leave Blackberry left b/c they wanted something different (most of them still liked Blackberry).  Every two years your contract is up and the cost to switch is fairly low so it’s a chance to get the latest and greatest. 

1. Management was a big part of my mistake as I felt the founders were the best people to run the company.  I was aware that they had made a big mistake in letting the market get away from them.  Thought over the summer they had come to the realization and was taking the steps necessary to get back on the right path.  Instead of operating like a fire had been lit under them, come to find out they had lost the perception of their brand and did not act like a normal technology company as far as turnaround times go.

2. In the past they could sell to companies and employees would basically do the marketing for them.  The lack of marketing and the growth of the consumer market in the states have left a large void for 1st time smartphone buyers.  Naming Jim B to CMO without any experience regarding the consumer has me scratching my head.  Any other CMO with the same results would have been fired already.  I have not seen one commercial or advertisement regarding BB7 through normal media.

3. RIM has done nothing to protect its brand image.  They do nothing to combat negative press.  This is a problem when people avoid your product b/c they think you are going out of business.  Based on Google results I can’t honestly say I would buy a phone b/c the perception is they will be out of business soon.

4. Constantly missed deadlines for new products to the market

5. Using different metrics to determine the stock was cheap.  When deadlines for new products are missed it hurt the earnings and the lack of demand/marketing did not allow for the earnings to be recouped.

6. While the subscribers are still growing in the company they are not growing at the rate of competitors.  Makes for an odd man out scenario regarding the company.

 

If anyone has anything constructive I’d like to hear it.  Since was an ass kicking for the ages I don’t want to miss anything.

 

Although I lean towards RIM being doomed, I also don't think it is quite the time to call it--it could still work out to some extent.

[CONeal]

 

Although I lean towards RIM being doomed, I also don't think it is quite the time to call it--it could still work out to some extent.

 

Not trying to call RIM doomed, just trying to do a post mortem up to the point where my position was exited so I avoid going through this again.  ;D.  Really hope they turn this thing around as I like their products.

[given2invest]

The $1 salaries cracked me up.  They are worth hundreds of millions.  Though that is getting smaller by the day.

[alertmeipp]

If they can turn this around - I would amazed.

I have less than 0.5% position in this.

 

I was hoping they will accelerate the schedule not delaying.

[Uccmal]

Coneal, I hear you.  I had Leaps at various strike prices, and a few low strike puts that I sold too soon.  The clock was ticking, and the announcement of the delay was the last straw.  Management has had a year with the playbook to ready QNX.  I was hoping for a leapfrog technology. 

 

Management has really damaged their credibility as far as I am concerned.  The one single element that stands out is the BBX to BB10 fiasco.  A simple copyright search by a semi-competent lawyer would have rooted that out.  I was floored by that oversight, even though it is insignificant from a sales or financial perspective. 

 

My fault was in continuing my position at that point, but we all know the deal with sunk costs.

 

If they had announced that BB10 beta was ready and being released on New Years day for developers and it did all the things Iphone, and Samsung does, plus security the stock would have rocketed.  But that is not what happened. 

[stahleyp]

Amazon thought about buying RIMM?

 

http://news.morningstar.com/all/dow-jones/us-markets/201112201756/000486/rim-turned-down-takeover-overtures-by-amazon-over-summer-reuters.aspx

[PlanMaestro]

Amazon thought about buying RIMM?

 

http://news.morningstar.com/all/dow-jones/us-markets/201112201756/000486/rim-turned-down-takeover-overtures-by-amazon-over-summer-reuters.aspx

 

and not only amazon [WSJ] Lots of tech with a hole in their pocket. Below TBV while FCF positive. Starting to look very interesting.

[Myth465]

This would be a game changer for MSFT / NOK. It would put MSFT right back in the boardrooms on smart phones and tablets as gate keepers or toll bridges.