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Why BlackBerry Stock Has Almost Doubled in a Week

By Rich Smith - Updated Jan 22, 2021 at 3:19PM

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The company has settled its dispute with Facebook, which apparently is still good news.

What happened

It's now been one full week since BlackBerry (BB -2.00%) announced that it has settled a patent dispute with Facebook (FB 1.18%). To date, no other news has emerged on the details of the agreement, which involved technology used in instant messaging. Both parties are keeping mum, with BlackBerry simply telling Bloomberg, "We have resolved our disputes pursuant to a confidential agreement and have no further comment."  

That seems fine with investors. Ever since the settlement was announced, BlackBerry stock has gone nowhere but up. After rising another 8% through 2:30 p.m. EST today, the stock is now up 87% in a week.

Cartoon professor with a pointer explains why a stock arrow is rising

Image source: Getty Images.

So what

Positive commentary in the news media appears to be keeping the rally going. Earlier this week, Investor's Business Daily noted that BlackBerry shares have "jumped well over a buy zone." And the newspaper wondered whether there might be even more upside ahead from an automotive pact with Amazon. It noted that BlackBerry signed a multiyear exclusive deal with Amazon's (AMZN 0.25%) Amazon Web Services (AWS) in December to develop a software platform to allow automakers to read vehicle sensor data, improving the performance of cloud-connected vehicles.   

Now what

But Investor's Business Daily admits that it's hard to guess the revenue potential from the BlackBerry/AWS alliance "pending better visibility to specific design wins." Regardless, the double dose of good news seems to be keeping investors excited about BlackBerry.

One note of caution: It is not a healthy company, and it's not negotiating with Amazon from a position of strength. According to data from S&P Global Market Intelligence, BlackBerry has lost money for seven straight quarters, and is expected to keep doing so. 

Simply put, BlackBerry needs this Amazon deal a whole lot more than Amazon does. It probably needed to settle with Facebook even more. Given the situation it's in, success for this stock is far from assured.

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Stocks Mentioned

BlackBerry Stock Quote
BlackBerry
BB
$5.89 (-2.00%) $0.12
Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$2,151.82 (0.25%) $5.44
Meta Platforms, Inc. Stock Quote
Meta Platforms, Inc.
FB
$193.54 (1.18%) $2.25

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