Why 1 Analyst Thinks BlackBerry Is In 'Reinvention Mode'
BlackBerry Ltd (NASDAQ: BBRY) received two Christmas gifts this week: big sales and new money.
BlackBerry Classic, the new version of the old BlackBerry handset, had sold out online in North America. It appears that the device is now available for pre-order again and should begin shipping this month.
BlackBerry also benefited from Vodafone Group Plc (ADR) (NASDAQ: VOD), which received $850 million in Canadian trade financing. The majority of the funds ($750 million) will be used to purchase enterprise services from BlackBerry.
Global Equities Research analyst Trip Chowdhry did not have much to say about either development, but he thinks it's all part of BlackBerry's reinvention.
"BlackBerry is in a reinvention mode," Chowdhry told Benzinga. "You cannot underestimate [...] or bet against John Chen. If you think about what BlackBerry was before John Chen -- [it was] nothing, right?"
Chowdhry said that BlackBerry is not a quick fix, but he pointed to Chen's track record at Sybase.
"People thought Sybase was dead," Chowdhry continued. "Sybase did not die -- it continued to grow. The company became profitable and it was sold handsomely to SAP."
Some analysts seem to think that BlackBerry will be the next Sybase, minus the turnaround. If nothing else, many of them aren't taking the time to follow BlackBerry's reinvention.
Two analysts told Benzinga that they had not heard about the Vodafone money. Another (who asked not to be named) told Benzinga that the "minutiae of developments" made BlackBerry "irrelevant" and not worth talking about.
Unlike Sybase, BlackBerry has been bombarded by buyout rumors that have involved a number of key players. Microsoft Corporation and Lenovo Group Limited (ADR) were just two of the companies that were thought to be interested in a deal at one time or other.
Not Dead Yet
Chowdhry said that investors should not jump to the conclusion that BlackBerry is dead.
"I think BlackBerry will reinvent itself to be a premiere software company," he added. "They'll probably create killer applications on every platform: iOS, Windows, Android. It is a software company first, a hardware company second. The transition will take three to four years, but you just cannot underestimate John Chen. That's what investors should learn."
Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
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