BlackBerry Stock Continues Slide Amid More Analyst Downgrades

Published on July 1, 2013
by John Paczkowski

BlackBerry_sinkholeInvestors took BlackBerry for another trip to the woodshed Monday as they continued to express their disgust over the company’s appalling first-quarter earnings.

Shares of BlackBerry slid 1.5 percent to $10.30 in early trading this morning, dragged down by another handful of analyst downgrades on the stock, among them a particularly brutal one from Needham’s Charlie Wolfe, who thinks BlackBerry may have already blown its chance at a comeback by delivering a “good enough” next-generation smartphone portfolio, when it desperately needed to release one that was a leap ahead.

“In our opinion the fault lies with the devices themselves,” Wolfe explains. “While they generally received favorable reviews, neither has a ‘wow’ factor that would translate into a ‘no-brainer’ upgrade. And in the case of the application library and ease of use, we find the BlackBerrys to be no match for the iPhone and Android phones. We now believe the upgrade cycle of the Q10 in the second and third quarters could create a ‘false spring,’ with sales tapering off once pent-up demand is satisfied.”

And even that prediction might be overly optimistic. Remember, in its most recent financials, BlackBerry missed badly on smartphone shipments, selling only 2.7 million BB10 devices. This in the first full quarter that those new smartphones were on sale — one that should have benefited from all sorts of new kit buzz.

BlackBerry_new-device-salesIf BlackBerry can’t spike sales with a pair of flashy new marquee product launches, what can it spike sales with? To that same point, what’s it going to take to stem subscriber losses? BlackBerry lost some four million subscribers during the quarter. And as Wolfe notes, net subscriber additions, “which have been in a virtually continuous decline over the past decade,” aren’t nearly what they need to be to drive a BlackBerry resurgence.

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