Blackberry shares halted amid wild surge to start 2021
If you’re wondering why the price of Blackberry Ltd. stock surged on Monday, you’re not alone: even the Canadian technology company itself said it wasn’t aware of any impending news that might be stirring up investor interest.
Shares of Waterloo, Ont.-based BlackBerry opened nearly 40 per cent higher when trading began on Monday, starting at $24.86 in Toronto, and continued to power higher throughout the morning.
The move was so abrupt that the Investment Industry Regulatory Organization of Canada wound up halting trading at 11:08 a.m. ET after the regulator’s single-stock circuit breaker was tripped. Blackberry, in response to a request for comment from IIROC, issued a press release around the same time. “The Company is not aware of any material, undisclosed corporate developments and has no material change in its business or affairs that has not been publicly disclosed that would account for the recent increase in the market price or trading volume of its common shares,” Blackberry said in its release.
While the shares gave back some of their gains to close at $22.92, up more than 28 per cent, the day’s action and a recent run that has seen them gain 170 per cent so far this year, had some observers looking for an explanation.
Blackberry has been trying to grow its business of selling “intelligent security software and services” to companies and governments.
A significant portion of that business is aimed at the auto sector and, in december, Blackberry and Amazon Web Services Inc. announced an agreement to develop and market the former’s “Intelligent Vehicle data Platform,” which is called IVY.
Blackberry chief executive John Chen said during a december conference call that IVY would address a big market opportunity and that they were targeting it for use by 2023 model vehicles.
The platform is still in its “very early innings,” but it could provide Blackberry with another product to sell to car companies and boost its automotive sector revenue, raymond James analyst Steven Li wrote in a dec. 18 note to clients.
morningstar analyst William Kerwin said that the recent surge in Blackberry stock “appears to be mainly a shift in investor sentiment, rather than a change in fundamentals.”
While there has been news around the company, it hasn’t really been material to the business, Kerwin wrote in an email to financial Post.
“We think the rise is likely due to a swell of retail investors, or perhaps a delayed add-on reaction to the partnership with AWS the firm announced in december,” Kerwin added.
“The AWS partnership is exciting for Blackberry, and shares popped in early december with the news, but since then there has been no new info about it to warrant price appreciation over the last two weeks.”
monday’s stock bump did come as Blackberry shares have become a popular topic on “r/wallstreetbets,” a forum on the website reddit that is dotted with internet memes and foul language.
Other favourites of the forum include video-game retailer Gamestop Corp., shares of which blew past us$140 apiece on monday morning — helped by a short-squeeze — before falling back down into the us$70 to us$80 range to end the day.
“Naming my first born $BB,” one Wall Street Bets social media post declared on monday.