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 (NYSE:BB). 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.
Brendan: Great. Thank you for your insights, Andrew. Fool on!