Its stock falls again. After reporting quarterly earnings that demonstrated a drop in every metric, including smartphone sales, shares of BlackBerry’s (BBRY) responded by dropping. There is much investors must concern themselves with on the hardware side of the business. Fortunately, key acquisitions in the year will result in meaningful profits as MDM/EMM (mobile device management / enterprise mobility management) consolidates.
BlackBerry patent licensing
BlackBerry is now comparable to Universal Display (OLED). The OLED supplier earns the bulk of its patent fees from Samsung (SSNLF), but the payment schedule is irregular. This means unsteady revenue quarter after quarter. The revenue from patents is small but meaningful.
Privatization still an end game
BlackBerry’s falling stock price is a mixed blessing. The firm issued a billion dollars’ worth of convertible debt, with a conversion price of $10. The company initiated a 47 million share buyback, and added another 15 million. While some shares are used for compensation, the rest may be saved up for the eventual dilution from the conversion. That means the company’s buyback will generate highly levered returns, provide the business rebounds.
15 years from now BlackBerry will not likely trade as a public company. Most Canadian-specific turnarounds in tech took 3 – 8 years to consolidate share price (BlackBerry is now on year seven in its bust-turnaround, which started in 2007). After that, company’s market cap exploded higher or was bought out. Examples: Cognos, Newbridge Networks, Jetform, and Hummingbird.
Apple (AAPL) 6s/6S Plus is all the rage, but carriers are spurring demand by essentially offering lease-to-own. A plummeting economy could endanger sales. My employee plan asks for a $700 deposit or $1,300 outright (CDN $) for the latest Apple.
Xiaomi turned in to a 0 BN to $40.6B market cap. Did it in around four years. BlackBerry may clearly win back Crackberry users on Samsung/android, but it’s too early to say. All that’s certain is that security in the enterprise and physical keyboard are hugely important for real estate sales people, business users, those serious on having a phone to make money.
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