Commentary: Some investors are starting to plan a funeral
By MarketWatch
SAN FRANCISCO (MarketWatch) — BlackBerry Inc.’s disappointing first
fiscal quarter, along with its bigger-than-expected drop in subscribers,
further dimmed investors’ hopes that the smartphone maker will ever
recover its lost luster.
On Friday, the smartphone pioneer surprised investors
with a far bigger drop in subscribers than anticipated, an indication
that, after a decent fourth quarter, the company’s new BlackBerry 10
software and new smartphones are not making a big enough impact to
attract new customers or maintain the current customer base.
That alone cost BlackBerry
BBRY
-27.76%
CA:BB
-26.38%
more than one-quarter of its market value by Friday afternoon — though
the stock remains well above its low in the range of $6 per share before
enthusiasm over the launch of BB10 devices ignited gains.
One analyst, Kevin Smithen of Macquarie Capital, made the amost
inevitable comparison to Palm, another pioneering mobile-device maker
that flamed out before being acquired by Hewlett-Packard Co.
HPQ
+0.12%
. Mark Sue, an analyst with RBC Capital Markets, wrote that a full
quarter with the new BlackBerry 10 products on the market “should’ve
resulted in better results.”
“BlackBerry could be discounting new and older products, which explains the decline in margins,” Sue posited.
In the wake of these results, many investors appear to be giving up hope
that the company can return to its former glory, or recover any vestige
of it, competing as it must with Apple Inc.’s
AAPL
+0.70%
iPhone and devices based on Google’s
GOOG
+0.38%
Android.
What happens next is anyone’s guess. But investment bankers are no doubt
sizing up the company’s declining valuation Friday and pondering
prospects for a takeover.
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