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BlackBerry (BBRY) Stock Rockets on DOD Deal

By: , dated January 21st, 2014

Shares of BlackBerry Ltd (BBRY) closed up +0.52 or +6.07 percent to $9.08 per share on Monday on twice its normal daily volume, after news the U.S. Defense Department will use the company’s smartphones in one of its new networks. Shares traded on Canadian exchanges due to the U.S. bank holiday on Monday. BlackBerry stock is trading at $9.70 per share, up +0.62 or +6.83 percent in pre-market trading this morning. The stock closed at $8.56 per share on Friday.

Waterloo, Ontario based BlackBerry, originally known as Research In Motion Ltd is a Canadian wireless equipment and telecommunications company best known for developing the BlackBerry brand of smartphones and tablets. The company had been having severe setbacks due in large part to competition from the Apple (AAPL) iPhone and Samsung Galaxy smartphones, which have taken a large share of the smartphone market.

The deal with the U.S. Department of Defense will have the government entity using 80,000 BlackBerrys, as well as 1,800 devices based on the Apple iOS operating system and Google’s (GOOG) Android OS. The devices will be used for the Department of Defense’s management system and will be connected as soon as the end of this month, according to a statement from the Defense Information System Agency or DISA issued last week.

The DISA, tasked with implementing information technology policy for the military, will begin phasing in a new system for personnel to access and work on unclassified documents from wireless devices. The first phase of the program is scheduled to begin January 31st and will include a military app store, currently supporting 16 mobile apps.

John Chen who began as BlackBerry’s CEO in November is concentrating the company’s efforts on government and business clients. DATEV, a German based IT company specializing in providing services for lawyers and tax advisors, last week ordered 1,000 BlackBerrys and has picked BlackBerry Enterprise Service 10 (BES10) as its Enterprise Mobility Management Solution.

BlackBerry devices, which have been used by the Department of Defense, meet the security specifications of the Pentagon, unlike their more popular counterparts made by Apple and Samsung. Also, the BlackBerry comes with a physical keyboard, which neither of its competitors offers.

One research firm, Citron Research has asked Wall Street to reconsider the beleaguered smartphone maker. In a note to investors last week, the firm stated that, “It is (our) opinion that it is suicidal to bet against well-capitalized strong management in the enterprise mobile space, the reality is (BlackBerry) has a healthy balance sheet, with ample liquidity to execute its turnaround strategy and make the necessary investments for growth”. Citron has a price target of $15 per share on BlackBerry.

With the recent DOD news and more businesses considering the BlackBerry as a secure and viable mobile option, the company may have more upside potential. Investors are voting positively with the price of BlackBerry stock up over +12 percent in two days. BlackBerry stock has already more than recovered last year’s 33 percent loss, gaining over 40 percent so far this year with its most recent move.

Other News About BlackBerry
BlackBerry Could Beat Earnings Estimates In Fiscal Year 2015
Analyst believes the company could make a comeback.
BlackBerry Enterprise Service 10 Selected by DATEV
BlackBerry has secured another large order from a German company.

Other Stocks in the News
Verizon recovers from huge loss with $7.9 billion Q4 profit
Carrier recovers from -$1.93 billion loss in 2012’s Q4.
Anheuser-Busch InBev rebuys Oriental Breweries
Brewer to buy back South Korean Oriental Breweries from private equity firm for $5.8 billion.

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