BlackBerry Limited (BBRY, Financial) has suffered a great deal in the stock market over the past few years due to unprecedented loss of market share of the company which was claimed by its competitors: Apple (AAPL) and Google (GOOGL, Financial). BlackBerry has been in a financial turmoil ever since Apple’s iPhone replaced its devices in the market, and the company has been trying to find different ways to turn its financial and market positions around. These efforts may finally be paying off now under the leadership of BlackBerry’s new CEO John Chen. This is BlackBerry’s first year under Chen’s leadership and the company is already being praised for its unforeseen improvement in financial performance and unprecedented gain of investor confidence.
BlackBerry’s turnaround efforts included the release of its new device called "BlackBerry Passport" which was very well received in the market. This was a unique device with features that were prominently different than those of other devices in the market. The device featured a touch-enabled QWERY keyboard which catered both touch and type enthusiasts. In addition to that, Passport boasts a 4.5 inch display with 1440x1440 pixel density and Qualcomm’s Snapdragon 800 chipset with 2.2 GHz quad-core CPU along with 3GB RAM. The demand for the device was so high, the company faced a shortage in supply and the Chen was actually happy about it, as the shortage clearly conveyed how the device was performing way beyond the company’s expectations in the market.
The latest turnout effort by the company is the launch of BlackBerry Enterprise platform BES 12, which was announced on the company’s investor day on November 13. The stock price of the company showed a positive trend as the investor event approached. The company was expected to announce some major advancements in its business strategy that will further add to the company’s plan to secure its financial performance in the future.
Other factors that highlight Chen’s success in bringing a turnout to the company are: investment by Ontario Teachers’ Pension Fund which bought $7.8 million shares of the company, stock price of the company is on track to beat NASDAQ’s Composite Index for the first time since 2009, and the increase in investor confidence directly resulting in increasing stock price. However, a sharp decline has been witnessed immediately after the company held the investor event. This is because the BlackBerry stock was downgraded by Morgan Stanley as the firm stated that the investors are likely too optimistic regarding the launch of new products. Figure 1 shows the market performance of the company over the past one year.
Figure 1: BlackBerry’s Stock Performance
(Source: Google Finance)
It can be observed in the trend of stock price that it has been fluctuating throughout the year, however the most recent trend shows a significant rise in the share price and then a significant decline. This is due to the positive advancements brought by the new CEO and then the downgrade by Morgan Stanley. The 52-week range of BlackBerry’s stock price is $5.44-$12.54, and at the time of this edition, the price of the stock was within the range of $10.06-$10.39. The trend shows that the stock broke its 52-week high recently and declined sharply afterwards. The financial performance of the company for the current quarter is yet to be announced and considering the success of BlackBerry Passport, positive outcomes can be expected.
It can be concluded that the turnaround efforts brought by BlackBerry’s CEO, John Chen, have started to pay off and the new advancements by the company are expected to have a positive impact on its financial performance in subsequent quarters. Although the stock price is fluctuating and it has remained highly volatile, a positive trend can be expected with the announcement of the current quarter’s financial information. In light of this analysis, BlackBerry’s stock can be given a “hold” rating.
