BlackBerry's Share Buyback an 'Incremental Positive,' Says JP Morgan

BlackBerry Ltd BBRY announced that it would buy back 12 million shares beginning on June 29 and ending June 28, 2016. That represents roughly 2.5 percent of the outstanding float. Despite the news, shares have drifted lower following the company's earnings report this week. At present, shares are near a 52-week low of $8.56.

JP Morgan's Rod Hall called the move "incremental positive news" in his daily digest. However, Hall said that ultimately, BlackBerry "needs to improve underlying fundamentals to spark more investor interest."

Earlier this month, Hall reiterated his Neutral rating on the stock, while noting that the "key to the real turnaround" would be penetration of BES 12.

In the most-recent earnings report, BlackBerry CEO John Chen said the company had 2,600 enterprise customer wins in the quarter. Of those, 40 percent were new customers, while 60 percent came to BES 12 through the company's EZ Pass program. Additionally, Chen touted the fact that software and licensing revenues increased 150 percent from the same quarter a year ago.

Year to date, BlackBerry has been subject to persistent acquisition rumors – often spiking sharply as reports hit media wires. In January, shares spiked from $9.71 to $12.60 on reports that BlackBerry was in talks with SAMSUNG ELECT LTD SSNLF. Shares have severely underperformed the market, declining more than 21 percent.