NEW YORK ( TheStreet) -- I'm long BlackBerry ( BBRY). Therefore, you can imagine I was thrilled to see Societe Generale upgrade the company to buy from sell yesterday. The stock jumped 6%, and it's up another 2% today. Given that I'm long the stock, I'm biased to think it is "cheap" and deserves all the upgrades it can get. However, I've got to be straight with you: the Societe Generale report simply makes no sense. Let me summarize. BlackBerry will next report earnings on June 28 for the May quarter. This is a battleground stock to say the least. Short interest on the float is in the mid-to-high 30% range. The revenue and earnings estimates for the May quarter are all over the map on Wall Street. Bears believe the June 28 report will be the beginning of the end for the company. Bulls think it will be the start of an amazing comeback.
In some ways, I would love this if it were true. According to estimates I've done, it's likely BlackBerry's losing money every time it sells a BB7 or PlayBook tablet device. The sooner the company can exhaust its inventory and shift the world to BB10s, the better. However, it's hard for even a BlackBerry bull like me to see the Z10s going from 1 million to 4 million units in the quarter. I think the number will surprise the BlackBerry bears, but I think it's more likely to expect something in the range of 2.5 to 3 million Z10s. But let's assume that SocGen is right. The analysts say the Z10 Average Selling Price (ASP) is $500 (which is probably right), and the Q10 goes for an ASP of $550 (also believable). They think the BB7s go for an ASP of $200. Put it all together with their numbers and you get to device revenues of $2.7 billion. Figure then that BlackBerry service revenue slightly declines (in the single digits) and you have to add another $900 million of revenue. You're now at $3.6 billion. Add in some software sales, and you get to their $3.7 billion revenue numbers.
If SocGen is right and the company surprises with its Z10 sales in the quarter, the stock will unquestionably fly on the earnings, and the many shorts will be forced to quickly cover, adding some accelerant to the fire. I think the Z10 numbers will surprise (along with early Q10 shipments). BlackBerry has been adept at figuring out ways to make its numbers look great in the last few earnings calls, and I would expect them to stuff as many new devices into the channel as they can -- figuring they're eventually going to sell them anyways. Unlike SocGen, I don't think the BB7s will fall off a cliff -- although the sooner they go, the better. To me, it looks like a really safe bet that BlackBerry will beat on the bottom line. I'm less sure on the top line. We will see. At the time of publication, Jackson was long BlackBerry. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.