BlackBerry might be making a comeback
A 65 per cent surge this year suggests investors are warming up to John Chen’s turnaround strategy
BlackBerry Ltd.’s comeback streak continued this week on the stock market, indicating investors have finally dialled into the former smartphone titan’s shift to software with a focus on security and the automotive industry.
Sentiment from investors and analysts alike hovered around lukewarm as BlackBerry underwent a three-year transition from a mobile phone producer — it officially gave up on designing its own last fall — to a software company with a variety of offerings targeted at enterprises that value its reputation for security.
But investors appear to be warming up to the strategy, especially over the last two months when a series of stock surges pushed BlackBerry’s shares up more than 65 per cent since the beginning of the year.
The latest of four stock price spikes hit the Toronto Stock Exchange on Tuesday (it occurred on the Nasdaq Stock Market on Monday, a holiday in Canada) in response to Ford Motor Co.’s Friday announcement about improvements to its in-car system, which is based on BlackBerry’s QNX software.
Ford, which recently hired about 400 BlackBerry engineers, announced the ability to update its Sync 3 systems over Wi-Fi instead of having to visit a dealership or download and install with a USB key. QNX software is used to power such systems in more than 60 million vehicles worldwide.
“BlackBerry is well positioned at the epicentre of this transformation,” CCS Insight analyst Nicholas McQuire said.
BlackBerry’s shares rose nearly nine per cent to $15.27 on the TSX on Tuesday, hitting its highest price in more than four years. It jumped more than nine per cent to $11.32 US in the U.S. on Monday — the highest since July 2014 — before dipping two cents Tuesday.
The stock started its upward trajectory in late March with an 11 per cent surge when BlackBerry reported quarterly results that beat Bay Street’s expectations. The next bump came mid-April when it won $815 million US in a binding arbitration in a dispute with Qualcomm over royalty payments.