29-Jun-2013

Blackberry Stock

Blackberry announced a loss of $84 million in its latest quarterly earnings announcement on Friday, June 28, 2013 before market open. On the much anticipated sales recovery with the new Blackberry 10 operating system for the Z10 and Q10 smartphones, analysts consensus was for a $0.07/share gain but Blackberry reported an adjusted loss of $0.13/share. Blackberry stock closed the trading day with a 26% drop as shown in the following BB Stock Chart.

As mentioned in many articles in the Stock Market pages, do not hold a stock past earnings announcement. This latest example with the Blackberry stock implosion is no exception. Despite overwhelming analyst recommendation forecasting positive earnings, the reality has proven analysts wrong and those holding Blackberry stock across this earnings announcement faced the risk with a 26% drop.

BlackBerry CEO Thorsten Heins: "I'm confident in the future of BB10, but there's lots of work to do still. So it's going to be an ongoing effort, it's not going to be automatic. It's a highly competitive smartphone market, so you've got to be on your tippy toes all the time. ... This is a marathon, and with our financials, we're ready to run that marathon."

My thoughts and opinions:

  • BB10 devices taking up shelf space needing to get into the hands of consumers while Blackberry CEO leads the company to run a marathon on tippy toes. [Picture an index finger making a circular motion around the temple area - this best describes this CEO.]
  • Anything above $0.01 is too much to pay this CEO.
  • If the board does not soon send this CEO sprinting to the door and beyond, the board should be replaced.

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