Once Upon a time: Blackberry was the company of future, creating a new Industry around Smartphone computing. Then came Apple iOS phones and Google Android phones - and Blackberry phones lost their market in practically no time. An iconic stock became a toxic stock with no takers. I remember tweeting this in 2015
Blackberry is trading at $6.08 and has $5.6 cash/share. It means stock is trading at cash on books level.
— Deepak Singh (@smarket) October 2, 2015
There are two things that can happen after such a disaster: Company transforms itself or Company just goes out of business. Blackberry management decided to transform
Birth of a New Company: Blackberry as a new Software company. I tweeted this in 2016
Blackberry is outsourcing all internal hardware development. The company will only focus on software. Yes Blackberry is still around $4bn co
— Deepak Singh (@smarket) September 28, 2016
So nothing much happened till March this year
Blackberry is still around...but no takers pic.twitter.com/i2LX1OykZH
— Deepak Singh (@smarket) March 31, 2017
Good Luck: Sometimes a struggling company needs little bit of good luck and it got it from Qualcomm aggressive pricing litigation. As somebody who follows breakout - this was the turning point
BlackBerry stock breaks out. Thanks to $815 mn refund from Qualcomm i.e. 0.54 cash/share. But can the breakout sustain? pic.twitter.com/KMERNHgLlY
— Deepak Singh (@smarket) April 16, 2017
What happened post Breakout: Breakout delivers outstanding return in short period of time
Why traders love breakout? - A month later - Blackberry at 11.32 - a rally of 30%. https://t.co/mCfwXoCY1T
— Deepak Singh (@smarket) May 23, 2017
Post Early euphoria - Turnaround works -The stock broke out - rallied 30% and then pulled back - giving investors another opportunity near 200 dma and see what it has done - big move today
Market runs ahead of news - All this technical move has not happened without reason. This is the news now
Why Price Action matters - As a trader/investor - you don't need to be sophisticated genius to understand small small complex details.
Price Action is a great way to monitor what's happening in the company and when is the right time to jump in. Blackberry is transforming and shareholders are getting rewarded while skeptics can watch it from distance. Nobody knows....Price Action is all about the journey and not final destination
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Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers