Sure, BlackBerry (BBRY) has a storied history as the creator of the first successful smartphone. And sure, BBRY sported about $3 billion in cash and short-term investments at the end of November.
But the beleaguered tech stock posted a simply staggering $4.4 billion loss in Q3 on a 56% sales decline, hasn’t posted an annual profit in two years and is projected to bleed cash through 2016.
$3 billion is a lot of money… but those are a lot of losses to stomach. And now there’s $1 billion in debt on the books to worry about for a company that historically hasn’t carried any debt.
Besides, the negativity is only accelerating as consumers and businesses abandon BlackBerry devices amid concerns the company won’t be around to service them in a few years. That makes BBRY declines and its strategic challenges almost a self-fulfilling prophecy for failure.
The fact BlackBerry co-founder recently Michael Lazaridis dumped 3.5 million shares is telling, too. It’s never a good sign when a guy who built a company from the ground up loses faith.
BBRY stock has popped almost 15% in recent days on news it will partner with Taiwan’s Foxconn for handset production to limit writedown risk in the future — yes, that Foxconn, the one that works with Apple (AAPL) — but mitigating production risk isn’t the same as ensuring consumer demand worldwide.
In addition to plummeting sales at home, once-powerful global markets are starting to crumble — such as a big rollback in Indonesia where BBRY market share fell from 39% to 21% in Q2 amid the mayhem, according to a report from IDC.
There is room for a No. 3 smartphone player behind Apple and Google (GOOG) with its Android-powered devices. But that’s likely going to be Microsoft (MSFT) with its Windows Phone software and Nokia (NOK) hardware … not BBRY.