BlackBerry Surges on Big Sale – Takeover Rumors Continue
Sometimes success is as simple as a sale. BlackBerry (NASDAQ: BBRY) shares surged Wednesday after the smartphone maker said it had received an order for 1 million BlackBerry 10 smartphones, with shipment set to begin immediately.
According to Reuters, the company did not disclose either the location of the "established partner" who placed the order or the period for the device sales. BlackBerry also did not disclose whether the order is for just Z10 devices or both Z10 and Q10 devices.
Despite the lack of detail, analysts view the announcement as a positive, especially since it comes after both Verizon Communications Inc. (NYSE: VZ) and AT&T Inc. (NYSE: T) - the two largest U.S. wireless carriers – announced that they plan to begin selling the Z10 device later this month.
"The combination of these three announcements gives us more comfort in our May quarter (forecast)," said Wells Fargo analyst Maynard Um in a note to clients.
Um, who has an outperform rating on the stock, expects sales of 2.5 million BlackBerry 10 devices in the quarter ending June 1.
BGC analyst, Colin Gillis, cautioned against reading too much into a single sales order. "It's good for them,” Gillis said, “But the reality is the sales are going to be spread out over time."
All this news follows speculation earlier this week of a takeover of BlackBerry by Lenovo. While the rumored takeover doesn’t appear likely, given Canada’s strong stand against acquisition of Canadian companies by Chinese companies, rumors persist.
It is not known what impact, if any, Wednesday’s announcement might have on any M&A developments relative to BBRY. For now, officials in Waterloo are enjoying the surge in sales brought on by this largest single purchase order in the company’s history.
Meanwhile, on CNBC, OptionMonster’s Jon Najarian said Wednesday that the timing of some buy orders ahead of the “big sale” announcement that sent BlackBerry shares higher appeared curious.
Speaking on CNBC’s "Fast Money," Najarian said that a spike in options buys preceded the BlackBerry announcement by more than a minute. "This was a lot of buying in that minute,” Najarian said. “Both options and stock. I'm suspicious.”
In the CNBC report, StockMonster's Guy Adami remains positive, saying, "I'm still firmly in the bull camp, and it's not because of those orders.”
Tim Seymour of EmergingMoney.com takes into consideration BlackBerry's popularity in emerging markets like India where he says it is both “cool” and in short supply.
BlackBerry is set to report fiscal fourth-quarter results March 28, for the period ended March 2.
Latest Ratings for BBRY
|Jun 2016||Imperial Capital||Maintains||In-line||In-line|
|May 2016||Macquarie||Initiates Coverage on||Underperform|
|Apr 2016||Imperial Capital||Maintains||In-line|
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