Blackberry Late Day Boost From Blog Post Not Enough To Mask Underlying Problems

Blackberry BBRY is fading the late afternoon rip they just experienced after the company posted a write-up on their blog. The stock ran from $7.22 to $7.44, a move over roughly 3% before fading that spike and trading around $7.28. 

In the post Blackberry commented about their cash holdings of $2.7BN and their efforts to slash their burn rate.    The author uses the cash metric as his basis to boast about Blackberry while addressing the comments of two of the firms biggest critics, Good Technology and MobileIron,

On the surface the cash position sound great but subtract total liabilities and divide that number by the diluted shares outstanding (to account for any convertible shares) and Blackberry has a Cash Asset Value per share position of negative $2, an improvement since last year negative $3.54 Cash Asset Value per share.    The company has also been deteriorating in regards to Inventory, Receivables, and Payables periods:

To highlight just the one cash metric and then attempt to lift your own standing by bringing down others isn't the way for Blackberry to generate shareholder value.  The company has taken active measures that are worth highlighting to do just that, increase value.  Blackberry has no Long-Term debt.  They are selling off assets in an effort to consolidate their business model in order to better compete in an industry they one dominated.  Back in March I shared this image:

Benzinga also broke the news ten days ago that the Real Estate Holdings sale in Canada would go through, with a price of $278 million.  The company is annoucing and following through on measures to actively pursue a turn-around. What is unclear is how the company will be able to utilize cash as means to improve their balance sheet as they draw in more investors with size like Fairfax so they can invest heavily in R&D to capture new patents that will organically improve the income statement.  Selling assets will only go so far.  At some point, and very soon, Blackberry needs to support itself with product sales.