BlackBerry (BBRY) is one of Wall Street’s favorite dogs to kick around.
It’s not hard to see why — BBRY will finish the fiscal year breakeven at best, consumers continue to shun BlackBerry gadgets and investors were deeply discounting BBRY stock vs. the company’s book value even during the brief run to $18 a share earlier this year.
Meanwhile, BBRY stock is down about 13% so far in 2013, vs. 15% gains for the S&P 500 in the same period.
But if you needed more proof that BlackBerry is struggling and that BBRY stock is a horrible investment, just check out the newest proof that its line of devices is falling flat: a report that the keyboard-equipped Q10 has failed miserably.
BlackBerry hasn’t said as much, of course, but reports from telecom carrier executives and retailers in the U.S. and Canada tell a story that is ugly enough.
“We thought there would be a pocket of die-hard BlackBerry enthusiasts waiting to upgrade, but it seems they have already moved on,” one electronics retail exec told The Wall Street Journal.
The Q10 was supposed to be a guaranteed winner for BBRY, since nobody else is pushing keyboard-equipped phones. The Apple (AAPL) iPhone proved the power of the touchscreen; Google (GOOG) Android devices from Samsung (SSNLF) and others built on that legacy; even business-centric phones running Microsoft (MSFT) software, including the Nokia (NOK) Lumia, forgo keyboards.
But BBRY fans have either moved on or are unimpressed by this new model.
BBRY Troubles Run Deep
“But wait!” you cry, “What about the BlackBerry Z10? That device was meant to move beyond keyboards into the the touchscreen age.”
Well, the Z10 rolled out in February in Canada and the U.K., and the following month it became available in the U.S. But the BlackBerry Z10 debut flopped hard, resulting in a surprise quarterly loss for BlackBerry stock at the end of June. In fact, sales of both BB10 devices together were just half that of Nokia’s Lumia last quarter.
If the Z10 can’t win over touchscreen smartphone customers and the Q10 winds up being a disaster even after BlackBerry CEO Thorsten Heins considered the keyboard-friendly crowd a given … well, it’s further proof that BBRY stock is doomed for the dustbin.
Shareholders better hope for a BlackBerry buyout bid soon, because with each passing day the news gets worse and BBRY becomes even less relevant — and subsequently, less valuable to a suitor.
But a BlackBerry buyout is highly unlikely. At this rate, why wouldn’t Wall Street just wait until the few valuable assets at the company are available at fire sale prices in a year or two? BBRY stock is sure to suffer further declines, so that gives buyers a big incentive to wait.
Shareholders, on the other hand, can’t afford to wait at all. Sell BBRY now.
Related Reading on BBRY Stock
- BBRY is dead. Just get over it already. (The Slant)
- Of course BBRY is “open to going private” — what choice does it have? (InvestorPlace.com)
- John Paczkowski wonders who would actually buy BlackBerry stock to take it private. (AllThingsD)
- BlackBerry 10 handsets just half of Nokia Lumia sales last quarter. (GigaOm)
Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at firstname.lastname@example.org or follow him on Twitter via @JeffReevesIP. As of this writing, he did not own a position in any of the stocks named here.