We looked at BlackBerry (then RIMM) in late-2012 and saw the makings of a stock not yet imminently going out of business. Buyers had presented themselves in a meaningful way, sentiment was horrendous, and a continued rally was likely.
Fast forward to this morning, and sentiment all of a sudden had become quite bullish, with many retail longs piled in for the big earnings short squeeze. As it turns out, there is a squeeze happening, but it is the longs who are the ones on the business end of it.
With the stock down over 27% as I write this, the main issue going forward is whether BlackBerry can now put in a meaningful higher low. That was the issue I had discussed each time we had followed-up on the name since the original post. And I continue to see it as the crux of the bull case going forward.
Observing the weekly chart, if buyers cannot adequately defend the $9 level this summer, which marked prior resistance in the darkest hours last year, the entire bull thesis is called into question.
For now, though, it appears we are seeing a similar shakeout of speculative longs not unlike the punishment overly-zealous bears faced last autumn.
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Quite the over reaction by the market IMO. The miss was not that bad considering analysts revised the numbers quite a few times before earnings. Management seems content at turning the business around and the still compiled $3.1B in cash. May be a strong buy at $9.
Mentioned this on Twitter yesterday, but the new blackberry phone is just complete trash.
Last week I was in a Verizon store, and got to hold one. I spent 10 minutes trying to make it work, while the 18 year old behind the counter just ridiculed the software the entire time.
Come on dude, it’s not trash. It’s a solid product, but Apple and Samsung own the market.