Most people look at Blackberry (formerly known as RIM) as a dead cellphone company. A company that’s basically a prehistoric dinosaur at this point with a small cybersecurity portfolio left of their business. Their inability to adapt against cell phone companies such as Apple & Android vendors has caused their main revenue driver to plummet into non-existence. However, their business has been able to keep afloat in the past few years due to their competitive advantages around cybersecurity. Many government officials & corporations till this day still use QNX from BB as their mobile/security platform due to these advantages.
Word on the street:
Around last year summer, word on the street was that BB is looking to partner with Amazon on a EV platform around data sensors, automation, and cybersecurity. Stock prices at the time was around $4-6 CAD. Just looking at financials alone and the amount of $ revenue they bring in compared to the industry standards, $BB stock price seemed quite undervalued in comparison. However, this made sense since $BB has failed to deliver and disappointed shareholders over the past years.
Whether we’d like to believe it or not — EV (electric vehicle) is the future in the next 5 years. Whether that is one day where we run out of fossil fuel… or people moving towards environmentally friendly options, there is much to be explored and the market is relatively immature.
In today’s world, every automotive company is chasing EV currently and wants to avoid becoming the next “Blockbuster” prehistoric company. The question we need to ask next is, “Do they have the necessary tools & solutions to help them transition in that journey?” To answer this, I will give a quick example. Most farmers do not build a tractor to farm their crops. They instead go out and buy one than to waste precious time seeing their crops die. I believe this holds true for automotives as they lack the necessary skill sets to develop a platform that can run cybersecurity, data sensors, and automation for their cars. If you didn’t know already, popular car services such as Apple’s CarPlay and Google’s Android Auto all already operate on top of QNX today in our cars today. Amazon’s partnership will only help accelerate that movement as QNX will be linked to their public cloud to do over-the-air monitoring, upgrade, security, collision crashing assistance, autonomous driving, AI machine learning, and many many more.
What’s happened recently:
Well… their partnership with Amazon came true around December. In addition to this, they’ve sold off their 💩 cell phone patents to Huawei so they can finally focus purely on Cybersecurity and EV.
Icing to the cake, they’ve recently won a settlement against Facebook so they gotta pay up that $$$ to $BB which hasn’t been reflected in their quarterly report yet.
SpaceX, Zoom, Qualcomm, governments, and many more are working with $BB as we speak today. Sony recently just announced their partnership with $BB for their next upcoming car last week. Overall, lots of exciting news back to back.
This explains the excitement around $BB and why it’s been taking off recently. I believe they will continue to do so as the EV and Cybersecurity market continues to evolve from its infancy. (With other digital “currencies” growing, would there be a bigger cybersecurity play for $BB? Who knows)
So.. what are the Risks:
3 things I can think of currently:
- No Revenue Growth despite all of the above
- EV doesn’t take off as much as it should. COVID is impacting sales of cars or sales of anything in general. Self-explanatory there
- Someone creates a better platform over $BB
This all depends if $BB is capable of hiring great salespeople to execute on their job. Only time will tell.
TLDR; In Conclusion
Most boomers will avoid $BB because they think it’s a cellphone company. Anyone that’s googled it recently will know that this isn’t true. I personally think $BB is very undervalued and with the reasons I’ve explained above, I feel there’s much potential for the company to grow. Lots of people are going to be selling it when there’s a bit of a profit but I think the company’s barely scratched it’s potential.
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence or consult your financial professional before making any investment decision.