This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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

BlackBerry's Sinking Ship

NEW YORK ( TheStreet) -- On Friday, shares of BlackBerry (BBRY) plunged after the company announced that its earnings would be well below estimates and said it is slashing 40% of its workforce.

I have not been a big advocate of BlackBerry or its CEO Thorsten Heins and his less than stellar management.

And since I'm sure there are still a load of BlackBerry loyalists out there who will blast this article, I'll leave the I told you so's for another day. Instead, I'll simply warn any prospective buyers eyeing the stock: PLEASE AVOID.

The all-caps was necessary, trust me. The Z10 was supposed to be the game changer that the Canadian smartphone maker needed to break back into contention. Along with the Q10, the phones were about to turn the world upside down with how great they were.

But great to who? Sales severely underwhelmed expectations, as BlackBerry whiffed when it reported earnings in June.

One thing BlackBerry did have going for it, and still does to a point, is that it carries no debt. However, the $3 billion pile of cash it had last quarter has dwindled to $2.5 billion and will likely keep falling.

The company isn't selling phones to consumers anymore, even though it released several new devices in 2013. It has written off almost $1 billion worth of inventory, a telling sign of how sales are going.

Fairfax Financial, a Canadian insurance company, has announced that it will be BlackBerry's savior, except that stepping in to take the company private at $9 per share doesn't exactly warrant a celebration party.

A little while back I wrote an article about why investors should buy Apple (AAPL) over BlackBerry, when they were both down roughly the same percentage year-to-date. I still think that is a good idea, especially in light of this recent takeover news.

I've been a BlackBerry bear, without question. However, even I could argue that the company is worth more than the paltry $9 per share offer. But I have to question: Who would be willing to buy BlackBerry who hasn't already stepped up to do so?

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free

Check Out Our Best Services for Investors

Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
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!
SYM TRADE IT LAST %CHG
AAPL $124.25 0.00%
FB $81.66 0.00%
GOOG $542.56 0.00%
TSLA $187.59 0.00%
YHOO $44.13 0.00%

Markets

DOW 17,698.18 -77.94 -0.44%
S&P 500 2,059.69 -8.20 -0.40%
NASDAQ 4,880.2280 -20.6570 -0.42%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs