BlackBerry Ltd (BBRY) just named named Carl Wiese its global head of sales, putting the 12-year veteran of tech giant Cisco (CSCO) in the hot seat as BBRY stock looks to turn things around.
Wiese is charged with juicing global sales, a crucial mission for BlackBerry considering the battered tech stock is projected a 25% revenue decline in fiscal 2015 with its $2.5 billion in planned revenue down dramatically from about $19.9 billion back in 2011.
I won’t argue with the changing of the guard, considering the ugly performance of BBRY stock on the top line. But when Wiese was running advanced technology sales at Cisco, that tech company also struggled mightily on the revenue front.
Sure, one could argue that part of the problem was legacy tech products, so Wiese and his “advanced technology” focus shouldn’t be as culpable.
Still, it’s hard to see this hire as anything more than rearranging the deck chairs on the Titanic.
Problems Still Linger for BBRY Stock
BlackBerry stock is down significantly in the past few years, but more importantly BBRY stock has given up about 30% since January 1 — proving declines are not just a distant occurrence sparked from its initial decline in market share.
The bulls will continue to dangle the prospect of a BlackBerry buyout, given that its secure messaging and patent portfolio does offer some value. However, BlackBerry buyout rumors, regarding a $7.5 billion offer from Samsung (SSNLF), amounted to nothing back in January — with good reason.
After all, why buy BlackBerry now when you can acquire BBRY for cheaper down the road?
BBRY stock isn’t going to zero anytime soon, what with $3 billion in cash and investments on the books — roughly three quarters of its entire market capitalization — over just $1.5 billion in long-term debts. However, being well-capitalized enough to avoid bankruptcy is hardly a vote of confidence for shareholders as BlackBerry market share continues to approach zero.
At this point, BBRY needs a whole new business model.
Notwithstanding Apple (AAPL), the smartphone business is a cruel game where almost nobody makes a profit. And even companies like Google (GOOG), which has seen huge “success” with its Android OS in regards to market share, find it difficult to turn that reach into actual profits.
That’s fine for a company like Google that is dominant in other arenas. But BlackBerry can’t afford to play the long game considering it hasn’t turned an annual profit since 2012.
Click to EnlargeThere may be a swing trade here at some point, as BlackBerry remains fodder for speculators, churning through 5 million to 10 million shares on a typical trading day. An obscene level of short interest in BBRY stock also makes it ripe for a short squeeze if and when a glimmer of hope arises in the headlines.
But betting against the traders who hold some 100 million shares of BlackBerry short is a risky proposition, and not for the faint of heart.
I find it difficult to like anything about BBRY stock here, and think the changing of the guard is just one more sign that the directionless tech company will continue to fall behind.
I’m not buying BBRY stock here, and neither should you.
Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. Write him at editor@investorplace.com or follow him on Twitter via @JeffReevesIP. As of this writing, he did not hold a position in any of the aforementioned securities.
