BlackBerry Co-Founder Dumps His BBRY Stake

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Brendan Byrnes: Hey, Fools, I'm Brendan Byrnes, and I'm joined today by our tech and telecom analyst for Fool.com, Andrew Tonner.

Andrew, let's take a look at BlackBerry (NASDAQ: BBRY  ) . I keep wanting to call it Research In Motion, but it's BlackBerry. Very interesting stock; high volatility. Recently we found out that Jim Balsillie, the co-founder, former CEO, sold all of his stake -- every single share.

Andrew Tonner: Just cutting ties to the company altogether, yeah.

Brendan: What does this mean?

Andrew: He's dumping his 5.1% stake in the company as of 2011. You look at this, contrast to another stock-sale storyline -- Erick Schmidt selling off some of his Google (NASDAQ: GOOGL  ) stake -- this one's a lot uglier.

This is basically him thumbing his nose at the company, saying he doesn't have faith in them and really taking advantage of the fact that the stock has really nicely appreciated from some of its lows that we saw last year.

Brendan: It's not terribly surprising, because they gave him the boot, right?

Andrew: Right, exactly. He and Mike Lazaridis were co-CEOs. Really at the time we saw the wheels coming off this company. They were forced out in favor of Thorsten Heins, the current CEO. We have seen the stock price really appreciate substantially since then, but at the same time you look at this company, it's sort of an "outside looking in" situation.

Now they've launched BB10. They haven't shipped any phones yet, but we know the Z10 will be coming out later this year after a few months, but Q10 as well breaking into North America at some point. At the end of the day, it's probably not going to a real needle-mover.

It's going to be really challenging for any of the companies that want to try to make a dent in the mobile space -- a company like a Nokia (NYSE: NOK  ) for instance, as well. Obviously, they partner with Microsoft (NASDAQ: MSFT  ) for the operating system for their Lumia line of phones to break in and actually challenge Apple (NASDAQ: AAPL  ) or Google, who are really the early movers and early entrants on this wave of mobile technology and now hold that de facto market share position. It's going to be incredibly challenging to disrupt them.

If you look from a strategic standpoint, how do you? Do you beat them on product? Well, you could try to, but they haven't at this point. Can you out-discount them? That's going to be challenging as well. We know that the telecom providers are willing to take subsidies up to a level, but at the same time, are they going to discount so much to the fact that they compete on price? Probably not as well. Are they going to lure more developers away as well? Probably not.

You look at the situation and you think, "It's going to be extremely difficult for Research In Motion, although I think the overhangs that they might even just go out of business altogether are over, but at the same time if they're going to be a viable enterprise and a real factor in this space, I just don't see a way that it can happen."

I think it makes sense, if I were Jim Balsillie, cut your ties altogether. The stocks went up nicely, basically doubled for him in the last pretty short term. Do I think it'll be at the same price, say, five years from now? Well, I don't know, but I'm definitely bearish on the company's prospects.

Brendan: Yeah, especially losing corporate customers, which was the BlackBerry's wheelhouse, previously.

Andrew: Exactly.

Brendan: Great. Thank you for your insights, Andrew. Fool on!


Read/Post Comments (18) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 19, 2013, at 10:40 PM, AmeriCanadian wrote:

    Blackberry phones are still better than Apple and their "Playbook" is has been out a couple years already and Apple has just come out with theirs. The Z10, contrary to your report is shipping to the UK and Canada and doing very well. They are available without a wait in line (which I chose to view as a positive for the company) in Canada. The Z10 is a new generation of phone and eventually the "fools" in the USA will discover it again. I have been able to check all my emails at the same time for 3 years, and there is just now a new app available to do that for Apple that "everyone is excited about". It's a shame you guys are so out of touch with the rest of the world. BUY BB now while its cheap!

  • Report this Comment On February 19, 2013, at 11:13 PM, RandomMeaning wrote:

    "their "Playbook" is has been out a couple years already and Apple has just come out with theirs."

    Hi. The iPad was out long before the Playbook. Anyone paying even the least amount of attention to tech would have known that. Perhaps you were thinking of Microsoft and their recent Surface launch. The rest of you suppositions are similarly lacking in accuracy.

    By the way, you really aren't doing Blackberry any favors by undercutting the credibility of their fan base.

  • Report this Comment On February 19, 2013, at 11:19 PM, RandomMeaning wrote:

    In regards to Balsillie selling his shares, it only means one thing: based on his previous experience running the company, he does not believe he would make sufficient profit on Blackberry compared to other investment opportunities. Nothing more, nothing less.

    Also, in one of the sentences, "you" should be "your" in my earlier post. My apologies for not being vigilant. I do wish there was an edit button.

  • Report this Comment On February 20, 2013, at 7:41 AM, eidsonb wrote:

    They have not shipped any phones yet??? Really...sure you wanna go with that??

  • Report this Comment On February 20, 2013, at 7:43 AM, eidsonb wrote:

    @random...to be fair he was not talking about the iPad...but the Mini...

  • Report this Comment On February 20, 2013, at 8:06 AM, infektu wrote:

    The illustrious Andres Tonner says "this one [Balsilie's sale] is a lot uglier [than Eric Schmit's].

    REALLY ?!?

    Last time we knew, E.Schmidt is still leading Google, while Balsilie has no control on BBRY and no insider info whatsoever.

    But I guess logic is inconvenient sometimes when one just "has to make a point".

    Who are these guys?!? What credibility do they have? Did they finish high-school?

  • Report this Comment On February 20, 2013, at 8:07 AM, infektu wrote:

    The title is wrong, it should read "BlackBerry Co-Founder Dump*ed* His BBRY Stake"

    whatever...

  • Report this Comment On February 20, 2013, at 8:14 AM, magnaman1969 wrote:

    Please do not allow napoleon dynamite to do any more stock analysis....

  • Report this Comment On February 20, 2013, at 8:14 AM, magnaman1969 wrote:

    "Fool on"...indeed

  • Report this Comment On February 20, 2013, at 8:26 AM, etgh wrote:

    This to me looks like an article written a month ago about a transaction that happened Dec. 31, 2012 !

    Can anyone answer why these articles keep re-surfacing over and over again ?

    Is it because the BB10 launch was relatively successful and there are no issues to report or twist into something scary ?

  • Report this Comment On February 20, 2013, at 8:32 AM, gettmoney wrote:

    New guy...same old story...next time find some new stories to cover Andrew Tonner...was this your test article if I can call it that..LONG BBRY

  • Report this Comment On February 20, 2013, at 8:34 AM, cbglobal wrote:

    Balsillie announced he would sell his entire stake in Blackberry way back when he resigned in March 2012. Where have your guys been the last year?

  • Report this Comment On February 20, 2013, at 8:36 AM, sammycooool wrote:

    Andrew and this clown are truly fools, of the stupid kind. We have begged them to stop these moronic videos yet they keep puking them out. It does really smell around here doesn't it? Same garbage from these two clowns.

  • Report this Comment On February 20, 2013, at 8:40 AM, Arthur1111 wrote:

    Only lies come from the mouth of this idiot.

    1- Jim Balsillie sold his stake as he had to do it within 12 month after being let go.

    2- Eric Schmidt is still the CEO of Google. Jim Balsillie was fired and has his own new business to run.

    Z10 coming later this year? Z10 is already in the US. But, the big carriers will offer it in 3 weeks. So, 3 week vs. LATER THIS YEAR is nothing but a lie.

    No one cares what the fools say any ways. They have been wrong all along.

    Don't worry about BlackBerry. Write about your Apple and tell investors why the stock is crashing.

  • Report this Comment On February 20, 2013, at 8:52 AM, tonyrenier wrote:

    When did you record this? Balsillie sold his shares last year. This is not news, or you did not read the Press Release. Please do not present yourselves as "experts" if you provide misinformation.

  • Report this Comment On February 20, 2013, at 9:00 AM, TooRusty wrote:

    Andrew , you stated they have not shipped any BB10 . To be correct, the product is available in the UK and Canada now . The US release is to be later. From news reports the product was well recieved, but the question is how much product is there in the pipeline for those markets

  • Report this Comment On February 20, 2013, at 9:00 AM, applesucks wrote:

    Why is everyone talking about Balsille? He was pushed out of his co-ceo position. He has nothing to do with Blackberry. Perhaps he needs his money to resume his dream of buying a hockey team. Who cares. What people are not talking about is the current co-founder that is still with bb, Mike Lazaridis. He still owns his shares.

    The media who has posted all these negative articles as well as the appletarts conveniently do not mention this. I suppose it scary being short.

  • Report this Comment On February 20, 2013, at 9:49 AM, PhoenixSun29 wrote:

    Balsille did not co-found RIM -- he was brought on several years later. Also, I wouldn't read a lot into the selling of his shares -- after being removed as co-CEO he basically wanted nothing to do with the company. I'd say the sale was more out of spite than a financial decision.

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