The meme stock phenomenon started out with retail investors pitching themselves against short-sellers, creating a short-squeeze and pushing the value of those stocks through the roof. Some investors got very rich thanks to the meme stocks, while some that jumped on the bandwagon late and couldn’t jump out on time lost a lot of money.
Many meme stocks were and still are just that — highly shorted securities — and offer little fundamental strength beyond that. But some meme stocks can be considered for more than just an internet phenomenon temporarily inflating their valuation. And one of them is BlackBerry (TSX:BB)(NYSE:BB).
The company
It would be a gross understatement to say that BlackBerry has seen better days. In its glory days, it was one of the most recognized phone companies in the world. The stock reached above $240 once, and nowadays, it has trouble going past $15 a share.
It’s also not a phone company anymore. BlackBerry has rebranded itself as a cybersecurity, Internet of Things, and Critical Event Management company. Cybersecurity overlaps with what the company was famous for: encryption of its phones. One area where the company has made great strides is BlackBerry QNX, a real-time operating system that is being used in more than 195 million vehicles around the globe.
The diversification is good, but the business hasn’t been able to regain its former glory. The closest it has been in the last few years is when the meme stock phenomenon pushed the value over 290% higher. But even then, the stock didn’t go past $20 a share.
The stock
BlackBerry company is not what it once was, and even though it’s not something better or even equal to what it was yet, its potential cannot be overlooked. The company is making great strides in the IoT market, and it might be very well positioned to take advantage of the electric vehicle boom as well as the autonomous vehicle boom (whenever it happens).
In cybersecurity, the problem is already established giants holding on to the market. Since secure communication was the company’s forte, it might gain some ground in mobile device security, but its chances of making it big in the cybersecurity market, in general, are relatively slim. However, it is recognized as one of the best Endpoint Protection Solutions currently available in the market.
Foolish takeaway
BlackBerry stock has potential, but the timeline of the potential might not be palatable for most investors. If you can buy the stock now when it’s in a rut, and if you are amiable to holding the stock for several years, ideally a decade or so, you might have a chance of seeing amazing returns. At its current price point, the tech stock can grow your capital more than eight times if it crosses the $100-per-share threshold.
