Abandon ship!

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BBRY Chiefs Walk Away – You Should Follow Their Lead

Just weeks after former CEO Thorsten Heins was given the boot, BlackBerry (BBRY) is kicking its chief operating and marketing officers to the curb as well. Roger Martin — a board member since 2007 — also is leaving BBRY, apparently of his own accord. So, is the housecleaning a positive for the company and battered BlackBerry stock?

Not really. It’s too late for BBRY.

BlackBerry stock was in desperate need of a managerial shakeup; of this there should be no doubt. The problem is, BBRY needed it five years ago, not today.

I want to compare BlackBerry management to that of Nokia (NOK), the Finnish mobile communications company that was, for most of the 1990s and 2000s, the largest and best-respected mobile phone maker on the planet.

After Apple (AAPL) launched the iPhone in 2007, both BBRY and NOK found themselves on the wrong side of the smartphone revolution. Nokia’s Symbian, once the dominant “smartphone” platform (I use this term loosely), found itself in terminal decline. BlackBerry, which had a better enterprise presence, took a little longer to feel the pinch.

But to any management team that wasn’t delusional or in denial, the handwriting would have been very clearly on the wall: Apple and Google (GOOG) were reinventing the smartphone market and leaving all others behind.

Faced with a slow but inevitable decline, Nokia CEO Stephen Elop responded with his now-famous “burning platform” memo. He scrapped Symbian and formed a partnership with Microsoft (MSFT) that would see Nokia adopt the Windows Phone operating system.

The jury still is out as to whether that was the right decision. The Microsoft partnership guaranteed that Nokia would have the financial backing it needed to stay afloat. But it ultimately still resulted in Nokia leaving the handset business. Microsoft has since purchased the Nokia division that makes the handsets, and Elop has since resigned from his post as CEO.

Still, had Elop not done what he did, Nokia would have suffered a slow bleed and most likely would have found itself in BlackBerry’s shoes today: slowly dying and waiting for the vultures to pick the company clean of any sellable assets.

BBRY never had a “burning platform” moment. Instead, BlackBerry stuck to a stubborn belief that their core customers would stick with them through thick and thin despite all evidence to the contrary.

Looking back at BlackBerry, there is no reason why management couldn’t have done what Elop did. It could have adopted Windows Phone. Or better, given its ability to be tailored and customized to each manufacturer, it could have adopted Android. Instead, BBRY bet it all on QNX, which might have made it a viable competitor … had BlackBerry released it three years earlier.

Returning to the management shuffle, BlackBerry stock is up just more than 1% in early Monday trading. Don’t get sucked in here. “Success” by the new management team will be measured by the prices they can get in shopping around the assets that BBRY still has, such as its patent portfolio.

Could BlackBerry have a life after handsets as a device management and security company? Yes, hypothetically. But is that something you want to bet on right now?

My advice is to walk away from BlackBerry stock. At some point, a corporate raider might make a fortune selling the company for spare parts. But we’re not to that point yet, and management has a lot more value to destroy in the meantime.

More About BBRY Stock

Charles Lewis Sizemore, CFA, is the chief investment officer of the investment firm Sizemore Capital Management. As of this writing, he was long MSFT. Click here to receive his FREE 8-part investing series that will not only show you which sectors will soar, but also which stocks will deliver the highest returns. This series starts Nov. 5 and includes a FREE copy of his 2014 Macro Trend Profit Report.

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  • rjg

    what a stupid article. come January and visit this article to find out how stupid recommendation this was

    • Mark Keefe

      Hi rjg,

      I was CEO of First Impressions Incorporated with my President someone named Shane based in Chattanooga, TN at that time. It was a privately held company and unfortunately for me per relatives, I assume because of IRS, it shows earnings of the the company when I was CEO on Google searches if I look for it right way and boom there it is. That is a recent pic of me per last summer and yes, people think in person, I look 28 but I have been in the markets 33 years thus am 28 and holding decades lol so in other words, I know the markets and this article is just wrong and will be proven so in December and of course in month you gave. I will go out on a limb and say by mid December to making it very soon on PPS. I admit, would like to see it drop lower first on emotional panic but stock will double from current prices in month you gave imo.

      BBRY might be down but did article look at debt, cash, intellectual property or anything else? Obviously not. Did article even mention how BBRY could diversified as as a CEO of it, I would be doing day one and starting out with the coming wireless electricity which will be in every home, office etc in the 20s and 30s and magnetism which is going to be problem solved for gravity and space travel proving no wings like a plane needed to lift straight up and take off considering we have broken speed of light and other great things. There are so many things coming that AAPL is clueless about that AAPL is the one that will be left in the dust by just one smart CEO. I am not the smartest person around so since, I believe I could get BBRY running well in a short period of time as the CEO and for shareholders too of course, I know plenty of others can who are smarter than I am and of course with a President or VP used to being on-board a publicly traded company and a great CFO however; my people hired at top would be those who see future technology clearly, make ways to get patents that are non-existent yet and get working on that important technology so BBRY does things fun, offers things people of all ages want and most importantly, offers things everyone will NEED.

      Just as it is with zero debt, the company is worth a whole lot more PPS if they just gave up and went private or sold imo so as for it going to zero like article acts as if is going to happen; NOT GOING TO HAPPEN. I say December we see good increase in prices and your month really big increases. You selected a good month so you seem to understand where this is going and how fast in a positive way. You should be writing articles imo.

      • wimaxter

        They do not have zero debt, after getting 1 billion cash injection, as reported Nov 4th. And they can’t go private, no entity is foolish enough to purchase them.

        • Mark

          BBRY was trading at what price @ that time and look where it went? I think it was a great price and thanks for more than 100% profits in less than two months later. There was zero debt.

    • wimaxter

      Why wait until January? We should all come back here on December 20th and see how stupid your post is.

  • Shark Boy

    This is such a load of BS. These folks were shown the door they did not walk away. Report the story straight…….

    • wimaxter

      Article only says Martin left on his own accord, and does not mention the manner in which the other two are departing. Can you not understand this?

  • Shark Boy

    If you study up on the company, you would understand that there technology is better, more secure and now lead by the right person to turn this thing around. The big ship started it’s 180 degree turn some time ago.
    Prepare for some greatness!

    • eekonomist

      I don’t understand how this company still has such devoted cheerleaders. My only conclusion is that you work for the company or are from the Waterloo area…must be stuck in the Lazaridis/Balsille reality distortion field.

      • midtiw

        Why is BlackBerry doomed? Give me a reason in your own words and not something regurgitated from what u read in the media. Try the device and think for yourself. Life is not a multiple choice questionnaire where the answers are given by some articles you read.

  • Mark Keefe

    Looks to me like some really smart posters on this article who know better than what article is stating. Did author think people are so dumb no matter if we have three decades in the markets or just one year?

  • joe

    “BlackBerry stuck to a stubborn belief that their core customers would stick with them through thick and thin despite all evidence to the contrary.”
    Much like Apple is doing today … is Apple the next Blackberry???
    Well Apple hasn’t innovated in at least 6 years selling pretty much a mere variation of the same phone release after release.
    The question is “How long till the fanboys realise they been taken for fools ??”
    Answer: Not much longer!!!