This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Short BlackBerry to $6, Buy Peanuts

Stocks in this article: BBRY AAPL DELL GOOG

NEW YORK ( TheStreet) -- As shares of BlackBerry (BBRY) traded at almost $14 per share on July 5, I warned investors to brace for more losses. It was clear that although the company had made some meaningful progress toward profitability, the recurring theme of one step forward followed by two bloodbaths was still at play.

Last Friday, with the company's preannouncement of fiscal second-quarter results, due Friday, Sept. 27, things were of the "bloodbath category." But unlike previous dances, I don't believe there will be any steps forward, given the worse-than-expected state of the company. Seeing no progress from its fight against Apple (AAPL) and Google (GOOG) in device sales, BlackBerry essentially said "to hell with the consumer market" and will instead turn its attention to the enterprise.

The news sent shockwaves to BlackBerry investors, many of whom have waited patiently and faithfully for the company to make good on its promise and resuscitate itself. But last week, while citing statements made by Bert Nordberg, who sits on BlackBerry's Board of Directors, it was clear that BlackBerry had no interest in prolonging the agony. In a conversation with The Wall Street Journal, Nordberg said:

"I think BlackBerry is able to survive as a niche company. But being a niche company means deciding to be a niche company. Historically, BlackBerry has had larger ambitions. But battling giants like Apple, Google and Samsung (SSNLF) is tough."

Looking back, it was obvious Nordberg was hinting at what was made official last Friday. We just didn't know to what extent. BlackBerry, or "the niche company," has now created the word "prosumers" to describe its target market. With no official definition of the term, we can safely assume it means "professional consumers," which is another way to describe the corporate enterprise.

Now, given that BlackBerry lost roughly $1 per share in cash during the quarter by going after a market that it can't win, I can't blame management for coming to terms with its situation. Further, management justified the decision by reminding investors that it was in the enterprise that the company had originally made its name.

While, this might be true, BlackBerry doesn't appear to realize that the enterprise has changed. And they don't want anything to do with BlackBerry. Weak phone sales mean weak adoption. And CIOs, or chief information officers, who once looked for ways to diversify into other operating systems no longer have a reason to include BlackBerry. As much as they would have liked, their employees -- by virtue of their spending -- have shown no interest in the new BlackBerry 10 phones.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs