BlackBerry (NYSE:BB) stock is a play many GenXers and boomers are familiar with from the early days of mobile phones. Younger generations likely know it as meme stock these days.
Both have it slightly right. However, unlike other meme stocks that are carcasses of companies that have outlived their usefulness, BB stock isn’t a crazy play on a sentimental stock.
BlackBerry has some real potential beyond just its superficial QWERTY keypads.
The real value in BlackBerry – then and now – was its secure network. It built its iconic handset to run its secure telecom platform. This is the heart and head of the product.
The phone was designed around the software and it just so happened there were a core group of users that loved a physical keyboard, even after touchscreens hit the market.
BB Stock Secures a Key Niche
Initially, BlackBerry was driven by government and corporate workers who needed a secure phone for office communications. BlackBerry devices were a much better solution to texting than the commonplace numerical keypad that had to be navigated for specific letters.
BB stock was solid after the dot-com bust and had a good business model. It never sought to be the No. 1 phone maker in the world. Its devices were hits, to be sure. They were status symbols of the corporate players and corporate wannabes alike.
It had a good run up until 2007. That’s when the first iPhone was released. The touchscreen, graphic user interface and ergonomics were game-changing. When the simple elegance of the iPhone appeared, the BlackBerry phone was like an electric typewriter versus a word processor.
Plus, the iPhone was for everyone, and Apple (NASDAQ:AAPL) had its own walled garden operating system and environment. It didn’t need BB’s network.
The Shift in BB Stock
If you look at BB stock’s chart, you see that it was hit in 2007 when AAPL launched but then was taken to the mat when the markets crashed in 2008.
At that point, companies were cutting expenses and staff, and phones were powerful enough, and networks fast enough to make a second, dedicated secure phone a luxury rather than a power broker’s necessity.
Plus, the touchscreen and innovative haptics were showing up all over the place. BB stock’s cool device was losing its cool and its audience.
But the company never disappeared, just its phones did. By the way, it has licensed its phone to a company that’s launching a new BlackBerry phone.
BB stock’s inherent value was its network security. It was simply embodied in its mobile device. After the smartphone 2.0 shift, BB still had its powerful secure network, which governments and organizations continued to use.
That business was steady, but it wasn’t high growth and didn’t garner a lot of headlines, partially because it’s a Canadian company and partly because most people want stories about new, shiny things, not old, polished things.
The thing is, BB never stopped innovating. Now it supplies major companies and governments with cybersecurity platforms for communications as well as to fight ransomware attacks and other significant breaches.
It also is very active in the Internet of Things (IoT) space, where secure communications among devices are at a premium. It has upped its artificial intelligence game as well, incorporating it into new security platforms.
The fact is, BB stock was flying under the radar when it recently received its meme status.
More Than a Meme Stock
BB stock was a value before the meme community got a hold of it. It had been sitting below $10 for years. Year to date it’s up 95%, and it’s up 153% in the past 12 months. This is ridiculous, but it doesn’t change the fact that BB stock is worth holding. The trouble is, it’s at an unrealistic premium now.
Given its current volatility, I would say it’s worth a buy below $10 for long-term investors. Its cybersecurity solutions are well respected and it has a strong position in key sectors moving forward.
Disclosure: On the date of publication, GS Early did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
GS Early has been an award-winning financial writer and editor for nearly three decades, working with many of the leading financial editors and publishers during that time. He’s seen a few things and heard plenty.