Word on the street is that Fairfax’s founder, chairman, and CEO Prem Watsa is closing in on a deal with Canada’s largest pension funds to take BlackBerry private. There may be a catch though: Fairfax is debating whether to auction off its hardware business to the highest bidder. And that’s where Lenovo could step in.
It’s no surprise that shipments of BlackBerry phones have fallen to 2009 levels, the height of the Great Recession. Fairfax might just want to pull an IBM and get out of the hardware business all-together and focus on BlackBerry’s services business. And who can blame them, the popularity of BlackBerry phones has fallen off a cliff.
BlackBerry used to sit on the throne when it came to North American cell phone market share. Fast forward four years and now it’s just a bug. Why throw good money away when clearly consumers are not migrating back to the Blackberry platform?
The technology sector is a fast paced, cut throat industry. And it’s only going to get worse. Engineering a turnaround in any industry is extremely difficult, but it takes a lot of brilliant/forward thinking people and money to revamp a dying tech company. That’s what made Steve Jobs so great. On the verge of bankruptcy, Jobs revitalized Apple and made it one of the largest companies in the world. But how often does that happen?
BlackBerry will likely never command the market share it once did, so why bother chasing after a hopeless dream? They should focus on their strengths and build upon that. Create a new dream. That’s how winning is done.
BlackBerry’s chart looks bearish in the short-term: it closed below its $10.87 support (its Fibonacci 23.6% retracement). Obviously any news can change the chart in in minutes, but let’s focus on what I do know: a trader sold the September-13 $11 straddle 10,000x for $0.87. Meaning someone believes BlackBerry doesn’t trade above $11.87 or below $10.13 this week.
Quarterly And Annual Earnings Expectations:
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