BlackBerry Limited (BB)

[JustForFun7]

taking the write down is something they had to do to reflect the true value of their business.

The strength of the share price in the market continues. This means there may be more to this rise than just short covering and day traders. Maybe the market is seeing some long term value in what Chen is proposing. I'm watching closely to see what damage the analysts and media can do.

More like a 15-18 months till Chen says profitability is reached. I think Chen is smart enough to set the bar low so he can more easily succeed.

Chen said nothing about selling the company. That is certainly not his intention. But he has effectively started down the road of getting out of the hardware business by signing this deal with Foxconn. This is a smart move on his part since it takes a company like Foxconn to make money off the hardware side of things.

The burn rate will be dropping very quickly. From reducing staff but from other things as well. One big one is the licensing costs they pay each quarter (about 500 million). These were based on doing much higher volume sales. These have been renegotiated and the savings are probably about 250 million a quarter. Chen knows he has to get his cost structure in order and is taking the steps needed to do this. As much as the shorts would like you to think Blackberry is going out of business, the balance sheet and steps being take clearly indicate this is not so. I think that is what the market is starting to see and value into to the share price.

JFF7