Many people consider Ontario-based Blackberry Ltd (NASDAQ:BBRY) a fallen angel, a business that has failed to grasp the reality of its demise, and a relic of a bygone era in the history of smartphones. It is easy to take this position on Blackberry when you consider the fact that the company has suffered much defeat in the Smartphone wars. Blackberry lost its esteemed position as the leading Smartphone maker after Apple’s iOS iPhones and Google-backed Android devices invaded the smartphone market.
The chart above shows the decline in Blackberry’s revenue over the last 4 years and the attendant decline in the share price over the same period.
What the Z10 Taught Me about Investing in Blackberry
I bought an unlocked Blackberry Z10 device a couple of weeks back for around $200 after the company had slashed about 70% off its launch price. I do not intend to provide another review of the device here, but I must say that Blackberry delivered beyond expectations on the device. Generally, the BB 10 OS and compatible devices is an impressive offering from Blackberry and I am sure that the company is far from dead as the decline in revenue and share price would want us to believe. I own two Blackberry Smartphones and I am long Blackberry; hence, you can say that I put my money where my mouth is as I recommend BBRY calls.
Why I am Optimistic about Blackberry’s Outlook
The quality packed into the BB10 series has shown that the company has the structure and capability to reposition itself for success in the tech sector even as it becomes increasingly clear that Blackberry might not achieve success as a device maker again. I am willing to acquiesce that the days of Blackberry’s dominance as a smartphone maker will not come back. For one, Blackberry lacks the muscle to undertake global marketing activities that will take on major competitors such as Apple, Samsung and even Microsoft-backed Nokia.
However, the company’s strong product offering as a secure and stable ecosystem will still make Blackberry relevant in the corporate world as work phones recommended by IT departments. More so, Blackberry is positioning itself for success as a software and services player. The company is already working on monetizing its BBM and it already has a foothold in automobile software. More so, Blackberry is carving a niche in the Mobile Device Management (MDM) market and in the Internet of Things (IOT) project.
Another reason to be optimistic about Blackberry is the contagious optimism of the company’s CEO John Chen. The CEO while speaking at the inaugural Code Conference yesterday has shown that he has a clear vision about where the company is headed. The C.E.O showed confidence in his ability when he said, “I’m the most qualified person to do this, or the only one they found…“I am quite confident that we’ll be able to save the patient… I am not by any shape of the imagination … giving up yet.”
How to Trade BBRY Options
The Most optimistic forecast for Blackberry places the breakeven to profitable ways somewhere in 2016; yet, I believe that investor confidence will soon return and that the stock’s share price will rise once again. I am buying three different call options at the $10 strike price. I recommend the BBRY Dec 2014 10.000 call (BBRY141220C00010000), BBRY Jan 2015 10.000 call (BBRY150117C00010000), and the BBRY Jan 2016 10.000 call (BBRY160115C00010000).
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