Is It Time to Put BlackBerry (BBRY) Out Of Its Misery?
PUBLISHED ON: Sep 24, 2013
Shares of BlackBerry (BBRY) plunged 17% at the end of last week, after the company reported that it was laying off 4,500 employees (40% of its global workforce) and that it anticipates a quarterly loss of nearly $1 billion for its second quarter. That loss was three times wider than what analysts had anticipated. In addition, BlackBerry announced that it would only release four smartphones instead of six this year.
Finally, topping all that misery, the company announced that it expects 80% of its Blackberry 10 phones sold to retailers to come back. Daily Chart
Unlike its rival Nokia (NOK
), which also suffered tremendously from underestimate Apple (AAPL
) and Google's (GOOG
) ability to disrupt the smartphone market, BlackBerry hasn't been able to release a single smartphone that has shown quarterly market share growth. Nokia was barely able to stem its bleeding by partnering with Microsoft (MSFT
) to replace its aging Symbian OS with Windows Phone OS. Meanwhile, the 100,000 apps in its BlackBerry apps store pale in comparison to the 900,000 apps in Apple's app store, and lack many of the popular apps that Apple and Android users rely on. Instead, BlackBerry stubbornly held its ground and declared that it would accept the transition from a mainstream market to a niche one. It also went from a claim that its products would continue dominating the enterprise market, which later turned into an admission that it would rely on "niche" enterprise markets to survive. BlackBerry followed up its refusal to change with increasing stages of self-denial enhanced by episodes of convincing itself that the "BlackBerry faithful" would never abandon them for Apple or Android handsets. Most absurd of all were CEO Thorsten Heins' repeated statements to reporters that its smartphone was as powerful as a laptop computer -- something any tech consumer has known for the past six years. BlackBerry still has $2.6 billion in cash, but it could burn through that cash faster than most investors think. It already burned through $500 million in cash last quarter. While it's clear that BlackBerry is currently facing the abyss, some investors are still hoping that BlackBerry will be able to sell itself. There are rumors that Fairfax Financial Holdings, the company's largest shareholder with a 10% stake, could be interested in taking the company private. However, Fairfax could just as easily be looking for a way to abandon this sinking ship before it goes under. Other News About BBRY BlackBerry to Cut 40% of WorkForce After Big Loss
Is there any hope left for BlackBerry? BlackBerry Warns of Big Loss, 4,500 Job Cuts; Shares Dive
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