5 Questions BlackBerry Investors Want Answered Next Week

The company reports earnings next week. Investors will be watching closely.

| More on:
The Motley Fool

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It’s been a tough year for BlackBerry (TSX: BB, NASDAQ: BBRY). Where should I start? The company has bled most of its market share to rivals like Apple and Google. Its new BB10 operating system was a flop. In the eyes of the investment community, BlackBerry is probably worth more broken up and sold for scrap than as a whole.

But there have been several interesting developments at the company over the past quarter, including the launch of BlackBerry Messenger on iOS and Android as well as renewed rumors of layoffs and buyouts swirling. That’s why investors should watch the company’s Sept. 27 earnings release closely. Let’s take a look at the top five questions shareholders want answered next week.

1. Is another round of cost cuts coming?
Earlier this week The Wall Street Journal reported that BlackBerry is preparing to cut up to 40% of its employees by the end of the year. The cuts come one month after the company announced that it had formed a special committee to explore its strategic options. If the rumours are true, it would be another confirmation that BlackBerry is waving the white flag in the smartphone business and positioning for the sale of the company.

2. How is BlackBerry Messenger doing?
On Wednesday, BlackBerry announced that it would open its proprietary messaging system BlackBerry Messenger, or BBM, to the iPhone and Android this weekend. The free application eliminates what has been a compelling draw for the company’s devices. However, the move expands the reach of the application, potentially creating a separate asset that could be sold. Investors will be eagerly waiting for the numbers from the launch.

3. What are BlackBerry’s strategic options?
Earlier this month, The Sunday Times reported that Prem Watsa, Chief Executive at Fairfax Financial Holdings (TSX: FFH), had gathered a group of buyers to rescue BlackBerry. According to the U.K. newspaper, Mr. Watsa has assembled billions of dollars in backing from the Canada Pension Plan Investment Board. Investors will be listening closely to any hints regarding the status of these negotiations.

4. How is the BB10 launch going?
At this point, the market has assumed BlackBerry’s BB10 launch was a complete failure. Handset sales have failed to meet expectations and the company has fallen to fourth place — behind Microsoft’s Windows phone — in global smartphone market share. If the launch was anything close to a success, management wouldn’t be discussing the sale of the company today. But even if BlackBerry has no future in smartphones, handsets sales are still an important source of cash and could impact the sale price of the company in liquidation.

5. Are subscriber losses slowing?
Outside of its smartphone business and patents, BlackBerry’s biggest asset is its subscriber base. But over the past three quarters the company has lost 8 million subscribers, half of which occurred during the last quarter alone. When trying to peg a liquidation value on BlackBerry, a lot hinges on management’s ability to plug those losses.

Foolish bottom line
It’s terribly ugly at ol’ Research In Motion. But the company has several catalysts that could drive its share price higher this quarter, including the BBM rollout, new cost-cutting initiatives, and the BB10 launch. But in such a volatile name, investors should probably just watch from the sidelines. I know I am.

And for a specific stock idea …
Not all Canadian companies are as volatile as BlackBerry. For a profile of some of the best this country has to offer click here now and download our special FREE report, “5 Stocks to Replace Your Canadian Index Fund”.

The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool Canada’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.

Disclosure: Robert Baillieul has no positions in any of the stocks mentioned in this article.

David Gardner owns shares of Apple and Google. Tom Gardner owns shares of Google. The Motley Fool owns shares of Apple, Google, and Microsoft.

Should you invest $1,000 in Canadian Utilities right now?

Before you buy stock in Canadian Utilities, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Canadian Utilities wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $21,345.77!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*.

See the Top Stocks * Returns as of 4/21/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Investing

coins jump into piggy bank
Dividend Stocks

How to Use Your TFSA to Earn $1,057/Year in Tax-Free Income

Investing $5,000 in each of these high-yield dividend stocks can help you earn over $1,057 per year in tax-free income.

Read more »

data analyze research
Tech Stocks

Is BlackBerry (TSX:BB) a Buy in May 2025?

While its recent downturn might not look pretty, it might be the best opportunity to buy BlackBerry (TSX:BB) stock and…

Read more »

Piggy bank with word TFSA for tax-free savings accounts.
Investing

Where I’d Invest the New $7,000 TFSA Contribution Limit in 2025

If you have $7,000 for the new TFSA contribution increase, here are three stocks I would contemplate adding to the…

Read more »

open vault at bank
Bank Stocks

2 Banking Stocks I’d Buy With $7,000 Whenever They Dip in Price

Two banking stocks are worth buying on the dip and as reliable passive-income providers.

Read more »

Paper Canadian currency of various denominations
Investing

How I’d Invest $7,000 in Financial Sector Stocks for Stability

This Canadian financials ETF may stay insulated from Trump's tariffs.

Read more »

Man in fedora smiles into camera
Dividend Stocks

How I’d Build a $20,000 Retirement Portfolio With These 3 TSX Dividend All-Stars

If you're worried about returns and want to focus on dividends, these dividend stocks are the first to consider.

Read more »

View of high rise corporate buildings in the financial district of Toronto, Canada
Dividend Stocks

If I Could Only Buy and Hold a Single Canadian Stock, This Would Be It

Here's why this high-quality defensive growth stock is one of the best Canadian companies to buy now and hold for…

Read more »

dividends can compound over time
Dividend Stocks

3 Canadian Market Leaders Where I’d Invest $10,000 for Sustained Performance

Market leaders like Alimentation Couche-Tard Inc (TSX:ATD) are worth an investment.

Read more »