New boss, same as the old boss

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BBRY Breakdown – ‘New’ BlackBerry Has Same Old Delusions

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.

bbry stock blackberry logoBut 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

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 editor@investorplace.com or follow him on Twitter via @JeffReevesIP.

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Comments
  • Matt Hartnett

    Your message, seems rather angry. Which leads me to believe you lost money on stock price with blackberry. I think you may be to close to the situation to make an open & neutral opinion, but I do thank you for your wonderful article. The bottom line I am a consumer and want privacy. If google, apple, microsoft…etc..has not changed legislation by the time I can replace my phone, I won’t care what apps are on the blackberry. Why do you suppose all government agencies are moving to blackberry? Thanks for your article and insight.

    • hasben10

      Actually Pentagon is considering moving away from Blackberry. I hope that doesn’t happen.

      • Mazy

        sorry whomever told you DOC was moving away from Blackberry was wrong. Why do you think DOD gave blackberry the exclusive right to run ON DOD networks on every device they sell. Apple and Samsung are not allowed to run on DOD networks unless managed by Blackberry MDM solution

  • dontcare

    You are a douchebag.

  • Dylan

    Ya this is a man venting. Some factually in correct bits in here as well.

  • Crazy

    The new CEO hasn’t said what he will do yet! So how do you know what path he is going to follow. Your just making biased assumptions from past experience. This new CEO has a proven track record. So let him do what he is supposed to do without making false assumptions. We will see what happens soon enough. Remember this guy turned around basket case companies. Blackberry may not be in great shape but they are not basket case yet, with 3 billion in cash. So we will see what happens, but writing biased articles with no facts is only for people who are shorting the stock.