Verizon Falls After Announcing Deal With Intel, BlackBerry Shares Surge

Shares of Dow Jones components Intel and Verizon Communications fell on Tuesday. BlackBerry was a notable outperformer

Jan 21, 2014 at 11:30AM

Despite a lack of major economic reports, the Dow Jones Industrial Average (DJINDICES:^DJI) had shed 115 points as of 11:30 a.m. EST Tuesday. Dow components Verizon Communications (NYSE:VZ) and Intel (NASDAQ:INTC) led their index lower after announcing a major deal. BlackBerry (NASDAQ:BBRY) was a notable outperformer: shares were up more than 8% early on Tuesday.

All quiet on the economic front
The market's deepening sell-off wasn't being driven by any major U.S. economic reports. In fact, there isn't much economic news set to be released this week at all. Apart from earnings reports, all that's on the calendar are the weekly jobless numbers on Thursday and some data on the state of the housing market.

Verizon beats on earnings, makes a deal with Intel

Despite reporting earnings that exceeded most analysts' expectations, Verizon Communications' shares were down more than 2.7% early in late morning trading Tuesday. For the fourth quarter, Verizon posted earnings per share of $0.66 on revenue of $31.07 billion -- both numbers beat consensus analyst expectations, but just slightly.

Verizon also announced that it would acquire Intel Media, a start-up business within the chip maker that had been working on a high-tech, Internet-based TV service. It isn't clear how much Verizon paid for Intel's technology, but on the surface the deal seems to make sense for both companies.

Intel's TV service was outside of its core business, while CEO Brian Krzanich has emphasized a strategy of keeping Intel focused primarily on chips. Selling its TV service allows Intel to hew to that vision. Verizon, meanwhile, has been pushing into cable TV with its FiOS service. Bundling Intel's technology should allow Verizon to give its cable customers a better, more high-tech TV experience.

Intel was down more than 2%.

BlackBerry rallies after analyst upgrade
BlackBerry's gain Tuesday seems to have been fueled by the U.S. Defense Department's announcement that it would allow 80,000 BlackBerry devices on its management system, alongside devices from its competitors.

Meanwhile, Citron Research on Friday made the case that BlackBerry shares could have a more than 50% upside from current levels. Citron believes BlackBerry will be successful in its transition to a company centered around enterprise services.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

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Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

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KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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