NEW YORK (TheStreet) --BlackBerry BBRY fell 1.8% on Thursday to $7.59 following news that co-founders Mike Laziridis and Doug Fregin will not attempt to buy the company.
Combined, the two co-founders owned about 8% of the Canadian smartphone maker. After announcing they won't follow through with making and offer Laziridis announced that he sold 3.5 million shares of his company. He now owns less than 5% of outstanding BlackBerry shares.
BlackBerry closed at $7.73 on Tuesday following comments from CEO Jason Chen regarding a new partnership with Foxconn to make low-end smartphones for emerging markets.
with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate BLACKBERRY LTD (BBRY) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- BLACKBERRY LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, BLACKBERRY LTD swung to a loss, reporting -$1.20 versus $2.24 in the prior year.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Communications Equipment industry. The net income has significantly decreased by 310.6% when compared to the same quarter one year ago, falling from -$235.00 million to -$965.00 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Communications Equipment industry and the overall market, BLACKBERRY LTD's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$144.00 million or 133.96% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 54.15%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 318.18% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- You can view the full analysis from the report here: BBRY Ratings Report