TohKokMeng79
2021-06-09
Blackberry
As Blackberry Enters the Meme Market, BB Stock Will Likely Stay Volatile
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This year,<b>Blackberry</b>(NYSE:<b><u>BB</u></b>) has become a recent target of a social-media-fueled frenzy. Currently, BB stock is up over 140% year-to-date (YTD). The shares skyrocketed in late January to a 52-week high of $28.77, as retail traders started going after stocks heavily shorted by hedge funds. Now, BB hovers around $16 or so.</p>\n<p><img src=\"https://static.tigerbbs.com/20274999833539baa8be2b9e884a70ee\" tg-width=\"300\" tg-height=\"169\" referrerpolicy=\"no-referrer\">Source: Shutterstock</p>\n<p>This trading frenzy has done similar things for other stocks. Most infamously, it pushed<b>Gamestop</b>(NYSE:<b><u>GME</u></b>) and<b>AMCEntertainment</b>(NYSE:<b><u>AMC</u></b>) shares by more than1400%and2400%respectively this year. Put another way, the proverbial $1,000 invested in GME stock and AMC stock in early January would now be around $15,000 and $25,000. A large number of retail investors have had substantial gains in a matter of months. It’s hard to argue with that kind of success.</p>\n<p>Short squeezes tend to be short-term rallies that end up with pullbacks of similar magnitude. Thus, wild price swings are a big part of the equation in meme-stock trading. Because of that, investors are now wondering whether the rally in BB stock is over or if we could see returns similar to those in GME and AMC.</p>\n<p>At this point, it’s sheer speculation as to what’s next for BB stock. So, investors who are able to allocate some risk capital could consider opening a small position in Blackberry shares. However, they should also realize that, from a fundamental valuation standpoint, BB stock is overvalued. Here’s why.</p>\n<p><b>BB Stock: The Potential Comeback Story for Blackberry</b></p>\n<p>Blackberry was once known as one the world’s largest mobile phone manufacturers. Those days are long gone. Now, the Canadian group is working hard to transform itself, with an objective to provide enterprise cybersecurity software and applications for electric vehicles (EVs).</p>\n<p>BB offers endpoint management and protection to businesses, specializing particularly in regulated industries and the government. For instance, the company recentlyobtained“certification from the National Information Assurance Partnership (NIAP), a U.S. government initiative which oversees the evaluation of commercial cybersecurity products for use in U.S. national security systems.” This certification was for its Unified Endpoint Manager (UEM).</p>\n<p>Blackberry is also currently building a broad range of enterprise cybersecurity software under the brand nameSpark. This past year has meant increased digitalization, leading to more cybersecurity threats for both organizations and individuals.</p>\n<p>According to<i>FortuneBusiness Insights</i>, the global cyber security market “isprojectedto grow from USD 165.78 billion in 2021 to USD 366.10 billion in 2028 at a CAGR of 12.0%.” This increased industry spending is expected to contribute significantly to Spark’s bottom line.</p>\n<p>That said, meme-stock traders seem far more interested in the company’s vehicle applications platform. And Blackberry has already gained a solid foothold in the automotive industry, thanks to itsQNX connected automobile technology.</p>\n<p>The QNX software, a mobile operating system, is now “used in more than 175 million vehicles.” This figure is poised to increase as self-driving technology picks up speed. However, the global semiconductor shortage continues to pose a threat to Blackberry’s revenues here in the short run.</p>\n<p>Altogether, 2020 put EVs and autonomous driving at the forefront for consumers and investors alike. Future quarters will show whether BB stock can create additional shareholder value based on its Spark and QNX platforms.</p>\n<p><b>How Recent Earnings Came</b></p>\n<p>In late March, Blackberryreportedfourth-quarter financial results as well as results for full fiscal-year 2021.For Q4, non-GAAP revenue was $215 million. A year ago, it had been$291 million. Additionally, non-GAAP earnings per share (EPS) came to 3 cents (basic and diluted), as opposed to 9 cents in the prior-year period. The company also generated $51 million in net cash from operating activities in Q4. Finally, total cash and equivalents stood at $804 million for the end of the year. CEO John Chen cited the following on the results:</p>\n<blockquote>\n “This has been an exceptional year to navigate, however we are pleased with QNX’s continued recovery, despite new challenges from the global chip shortage. QNX now has design wins with 23 of the world’s top 25 electric vehicle OEMs and remains on course to return to a normal revenue run rate by mid-fiscal 2022.”\n</blockquote>\n<p>On top of this, management also said that the company recently “entered into an exclusive negotiation with a North American entity for the potential sale of part of the patent portfolio relating primarily to mobile devices, messaging and wireless networking.”</p>\n<p>Following the results, BB stock initially declined from about $9.40 to $8.40. Since then, though, meme traders have entered the scene. On June 3, the shares went above $20, only to come down to around $14 within two days.</p>\n<p>Right now, BB stock’s forward price-to-sales (P/S) and trailing price-to-book (P/B) ratios of 11.17 and 5.92 point to a frothy valuation level by historical standards. Given the interest of momentum traders in Blackberry shares, we can expect choppiness to continue in the long run.</p>\n<p><b>TheBottom Line on BB Stock</b></p>\n<p>Blackberry shares — as well as other meme stocks — have become part of the daily Street talk. As a result, BB stock has already seen considerable returns in the past several months. Yet, the meme-stock frenzy does not necessarily change the fundamental value of a company. Sooner or later, revenue and profits come into the equation.</p>\n<p>In other words, if you are a short-term trader, you might be able to ride the wave of momentum in BB stock for now. If you are a long-term investor, however, it’d be important to remember that once the hype fades away and retail investors lose interest, a potential selloff in BB stock should easily drag the shares below $10.</p>\n<p><i>On the date of publication, Tezcan Gecgil was</i><i> both long and short BB.The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.</i></p>","source":"lsy1606302653667","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>As Blackberry Enters the Meme Market, BB Stock Will Likely Stay Volatile</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nAs Blackberry Enters the Meme Market, BB Stock Will Likely Stay Volatile\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-09 17:35 GMT+8 <a href=https://investorplace.com/2021/06/as-blackberry-enters-meme-market-bb-stock-will-likely-stay-volatile/><strong>investorplace</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>BB stock has become the latest meme to join the trading frenzy.\n\nLove it or hate it, the “meme market” might be here to stay for awhile. This year,Blackberry(NYSE:BB) has become a recent target of a ...</p>\n\n<a href=\"https://investorplace.com/2021/06/as-blackberry-enters-meme-market-bb-stock-will-likely-stay-volatile/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://investorplace.com/2021/06/as-blackberry-enters-meme-market-bb-stock-will-likely-stay-volatile/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1157286063","content_text":"BB stock has become the latest meme to join the trading frenzy.\n\nLove it or hate it, the “meme market” might be here to stay for awhile. This year,Blackberry(NYSE:BB) has become a recent target of a social-media-fueled frenzy. Currently, BB stock is up over 140% year-to-date (YTD). The shares skyrocketed in late January to a 52-week high of $28.77, as retail traders started going after stocks heavily shorted by hedge funds. Now, BB hovers around $16 or so.\nSource: Shutterstock\nThis trading frenzy has done similar things for other stocks. Most infamously, it pushedGamestop(NYSE:GME) andAMCEntertainment(NYSE:AMC) shares by more than1400%and2400%respectively this year. Put another way, the proverbial $1,000 invested in GME stock and AMC stock in early January would now be around $15,000 and $25,000. A large number of retail investors have had substantial gains in a matter of months. It’s hard to argue with that kind of success.\nShort squeezes tend to be short-term rallies that end up with pullbacks of similar magnitude. Thus, wild price swings are a big part of the equation in meme-stock trading. Because of that, investors are now wondering whether the rally in BB stock is over or if we could see returns similar to those in GME and AMC.\nAt this point, it’s sheer speculation as to what’s next for BB stock. So, investors who are able to allocate some risk capital could consider opening a small position in Blackberry shares. However, they should also realize that, from a fundamental valuation standpoint, BB stock is overvalued. Here’s why.\nBB Stock: The Potential Comeback Story for Blackberry\nBlackberry was once known as one the world’s largest mobile phone manufacturers. Those days are long gone. Now, the Canadian group is working hard to transform itself, with an objective to provide enterprise cybersecurity software and applications for electric vehicles (EVs).\nBB offers endpoint management and protection to businesses, specializing particularly in regulated industries and the government. For instance, the company recentlyobtained“certification from the National Information Assurance Partnership (NIAP), a U.S. government initiative which oversees the evaluation of commercial cybersecurity products for use in U.S. national security systems.” This certification was for its Unified Endpoint Manager (UEM).\nBlackberry is also currently building a broad range of enterprise cybersecurity software under the brand nameSpark. This past year has meant increased digitalization, leading to more cybersecurity threats for both organizations and individuals.\nAccording toFortuneBusiness Insights, the global cyber security market “isprojectedto grow from USD 165.78 billion in 2021 to USD 366.10 billion in 2028 at a CAGR of 12.0%.” This increased industry spending is expected to contribute significantly to Spark’s bottom line.\nThat said, meme-stock traders seem far more interested in the company’s vehicle applications platform. And Blackberry has already gained a solid foothold in the automotive industry, thanks to itsQNX connected automobile technology.\nThe QNX software, a mobile operating system, is now “used in more than 175 million vehicles.” This figure is poised to increase as self-driving technology picks up speed. However, the global semiconductor shortage continues to pose a threat to Blackberry’s revenues here in the short run.\nAltogether, 2020 put EVs and autonomous driving at the forefront for consumers and investors alike. Future quarters will show whether BB stock can create additional shareholder value based on its Spark and QNX platforms.\nHow Recent Earnings Came\nIn late March, Blackberryreportedfourth-quarter financial results as well as results for full fiscal-year 2021.For Q4, non-GAAP revenue was $215 million. A year ago, it had been$291 million. Additionally, non-GAAP earnings per share (EPS) came to 3 cents (basic and diluted), as opposed to 9 cents in the prior-year period. The company also generated $51 million in net cash from operating activities in Q4. Finally, total cash and equivalents stood at $804 million for the end of the year. CEO John Chen cited the following on the results:\n\n “This has been an exceptional year to navigate, however we are pleased with QNX’s continued recovery, despite new challenges from the global chip shortage. QNX now has design wins with 23 of the world’s top 25 electric vehicle OEMs and remains on course to return to a normal revenue run rate by mid-fiscal 2022.”\n\nOn top of this, management also said that the company recently “entered into an exclusive negotiation with a North American entity for the potential sale of part of the patent portfolio relating primarily to mobile devices, messaging and wireless networking.”\nFollowing the results, BB stock initially declined from about $9.40 to $8.40. Since then, though, meme traders have entered the scene. On June 3, the shares went above $20, only to come down to around $14 within two days.\nRight now, BB stock’s forward price-to-sales (P/S) and trailing price-to-book (P/B) ratios of 11.17 and 5.92 point to a frothy valuation level by historical standards. Given the interest of momentum traders in Blackberry shares, we can expect choppiness to continue in the long run.\nTheBottom Line on BB Stock\nBlackberry shares — as well as other meme stocks — have become part of the daily Street talk. As a result, BB stock has already seen considerable returns in the past several months. Yet, the meme-stock frenzy does not necessarily change the fundamental value of a company. Sooner or later, revenue and profits come into the equation.\nIn other words, if you are a short-term trader, you might be able to ride the wave of momentum in BB stock for now. If you are a long-term investor, however, it’d be important to remember that once the hype fades away and retail investors lose interest, a potential selloff in BB stock should easily drag the shares below $10.\nOn the date of publication, Tezcan Gecgil was both long and short BB.The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.","news_type":1},"isVote":1,"tweetType":1,"viewCount":80,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":["BBRY","BB"],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":10,"xxTargetLangEnum":"ORIG"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/189903482"}
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