BlackBerry (BBRY) has done everything to prove the naysayers right. A failed $9 buyout bid from Fairfax Capital, a horrible debut for its BB10 line that was meant to reinvent the company, a death spiral for BBRY stock … seems like BlackBerry has literally done nothing right in 2013.
But despite these very real missteps and challenges, BlackBerry isn’t giving up! In a recent letter to the few remaining believers out there, new CEO John S. Chen contends that BlackBerry is “committed to reclaiming our success.”
Uh, sure Johnny. Good luck with that.
BBRY is around $6.50 a share right now, compared with a peak of over $18 for BlackBerry stock to start the year (to say nothing of the lofty days of 2007, when the company’s stock surged over $200 a share). And consumers and businesses alike are running screaming on the expectation that BlackBerry mobile devices will not be around for long.
But keep on keeping on.
BlackBerry Stock Has Little Upside
In defense of BBRY and Chen, it’s not like a company in this position can ever admit defeat.
Remember Kodak? In October 2011, as bankruptcy rumors swirled, the company insisted in a press release, “Kodak is committed to meeting all of its obligations and has no intention of filing for bankruptcy.” But by January 2012, just three months later, it had filed for Chapter 11.
But whether this is just putting on a brave face or really delusional behavior is academic to investors.
Because the bottom line is that BBRY is doomed, and nobody should be buying BlackBerry stock.
From a device perspective, the BB10 line of smartphones has been a complete flop, failing to put BlackBerry in the same sphere as top mobile competitors Apple (AAPL) and Google (GOOG). The Z10 and Q10 failed miserably to catch on — and now that the company’s future is in question, consumers and businesses are even less likely to buy BBRY products for fear support won’t be there should BlackBerry stock go under.
As a result, BlackBerry stock continues to suffer.
There have been the buyout bulls who expect a deal to come soon, thanks to the decent patents BlackBerry is sitting on, but reports indicate any interested suitors have been after only part of the BBRY business — not the whole thing.
Part of the reason former CEO Thorsten Heins got the ax was reportedly his refusal to entertain a breakup of BlackBerry, and perhaps Chen will be different.
But what suitor now would be willing to bid for part of BlackBerry’s business when it has become clear that the company is worth less with each passing day? Why not simply wait for a fire sale on the verge of Chapter 11 — or even after, in bankruptcy court, as we saw with some of Kodak’s patents?
The bottom line is that BlackBerry is done. And no matter what brave face the new CEO puts on things, it won’t be much longer until this smartphone company is officially a thing of the past.
More on BlackBerry Stock
- Why BBRY will wind up in little pieces. (The Slant)
- The full note from new BlackBerry CEO Chen. (Official BlackBerry Blog)
- How a $9 per share deal for BBRY fell apart. (LA Times)
Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. As of this writing, he did not hold a position in any of the aforementioned securities. Write him at email@example.com or follow him on Twitter via @JeffReevesIP.