BlackBerry Ltd (BBRY): The Game Clock Is Ticking Down to Zero

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BlackBerry stock - BlackBerry Ltd (BBRY): The Game Clock Is Ticking Down to Zero

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Like an injured, sick animal that knows it’s fighting for its life, BlackBerry Ltd (NASDAQ:BBRY) is doing anything and everything it can just to stay alive and salvage some value from BlackBerry stock.

BlackBerry BBRY

To some fans (and owners) of BlackBerry stock, the strategic moves may just look like part of the migration away from being in the mobile phone-making business and toward being a software company. And, giving credit where it’s due, last quarter’s numbers do suggest that’s a reasonable tactic; there’s no real future for the company in handhelds.

Most traders aren’t buying the optimism CEO John Chen is trying to sell. The vultures are starting to circle, suspicious that a couple of recent last-ditch efforts aren’t going to be enough.

Too Little, Too Late, Too Irrelevant

The most recent of the initiatives the company has put into motion to rekindle its growth is unveiling its KEYone phone at this year’s Mobile World Congress, and the decision to provide an app developer’s kit for the company’s propriety messaging software. The KEYone device has the familiar, BlackBerry-signature physical QWERTY keyboard.

Both are noteworthy measures to be sure, but also surely not enough to make a dent in the dominance of the Apple Inc. (NASDAQ:AAPL) iPhone, or Android devices from Samsung Electronic (OTCMKTS:SSNLF). These are the real targets that need to be taken down, if they can be taken down.

Thing is, they can’t be taken down … at least not by BlackBerry’s recent developments.

The QWERTY keyboard is nostalgic because touch-screens weren’t practical when BlackBerry launched the smartphone movement in the early 2000s. They offer no advantage for users. Meanwhile, offering a developer’s kit for BlackBerry’s messaging service is a step in the right direction.

The existing user base of BlackBerry users is already so small, however, it would make little sense for most developers to make the BBRY’s platform a priority (even though it’s arguably the device with the best mobile security available).

BlackBerry missed the point, and the boat, again.

BlackBery Stock is Spring-Loaded

While most stocks more or less tell the fundamental story — over time — for a company, few equities do so as accurately as BlackBerry stock does.

BBRY stock was crushed between 2008 and 2014, as the rise of the iPhone and other smartphone players effectively squeezed BlackBerry out of the market. That selling abated in 2014 when Chen was named CEO, bringing a turnaround plan with him. Though not bullish per se, neither was the market wildly bearish.

Indeed, BlackBerry stock has been squeezed into the point of a converging wedge pattern that whole time, with the point positioned somewhere later this year.

With both the 100-day moving average line (gray) and the 200-day moving average line (green) now sloping in a downward direction, the chart’s telling us there’s a bearish bias in the ether.

BBRY won’t likely make it all the way to the point of the triangular shape; the pressure is close to being overwhelming as it is. The question is, in which direction will this brewing pressure send shares? The market is going to have to decide soon.

And, calling a spade a spade, this is a chart that the company’s — and BBRY stock’s — biggest fans hate, as it indicates the market is more and more doubtful about BlackBerry’s future, even though the software venture seems to be bearing some fruit.

With both the 100-day moving average line (gray) and the 200-day moving average line (green) now sloping in a downward direction, the chart’s telling us there’s a bearish bias in the ether. It’s the bulls’ job to prove the bears wrong, and it’s not getting any easier.

Still, never say never.

Bottom Line for BBRY

With all of this reality on the table, the earnings report slated for April 7 could be the make-or-break moment for BlackBerry stock. It has been phasing out of the device business since the middle of last year, and it’s been wading deeper into the software game since around the same time.

BBRY shareholders were willing to give the company the benefit of the doubt as it turned the ship in a new direction, but this is the quarter where the company needs to show the market something.

As InvestorPlace contributor Richard Saintvilus recently put it, the company “must do more than just show ‘proof of life’ every once in a while.”

Early April will likely be the last chance CEO Chen has to convince the market the paradigm shift toward software has been worth it. If BlackBerry stock breaks under the lower edge of that long-term wedge, that’ll answer the question of what investors have finally decided.

After three years of thinking about it, they probably won’t be wrong.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2017/03/blackberry-ltd-bbry-stock-game-clock/.

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