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BlackBerry Ltd, formerly known as Research In Motion, was founded in 1984 and it has been operating in the technology sector ever since. Throughout its history, the company has used artificial intelligence and other emerging technologies to develop and deliver many different products to its customers, belonging to different technological niches, such as the Internet of Things, cybersecurity, licensing, encryption and more.
After its first decade of operations, Research In Motion sought an IPO in 1998 and was listed in January under the ticker symbol: RIM. However, during a shareholder meeting in 2013, it was decided to change the company’s name to BlackBerry and change the ticker symbol to BB.
Regardless of BlackBerry’s name changes, the underlying products and services remained solid throughout the prolific history of this Canadian company. An example could be the iconic BlackBerry 10 phone, which the former US president Barack Obama himself didn’t want to give up for an iPhone!
Now let us move on to the financials and let me explain how you can add exposure to BlackBerry.
Contents
BlackBerry Stock Key Features
BlackBerry’s ownership has been extremely diluted over the years. To this date, there are 583 Million outstanding shares, of which, only 1.8% are closely held whereas the all the rest is free float.
Dividends
The company has never paid dividends throughout their history. On one hand, this could be beneficial for the financials of the company due to the fact that any profit is then reinvested in the company, however, this feature could make this stock less appealing for people looking for more periodic and regular payments rather than potential long-term capital gains after many years of ownership.
Debt Composition
The majority of BlackBerry’s debt is composed by short term liabilities, which in the last financial year have amounted to $726.9M, an amount slightly lower than the reported assets which are equal valued at $740.86M. However, long term debt is relatively low, consisting of only $92.73M.
Leverage and Debt Coverage
The Canadian company has maintained a relatively low leverage over the past decade, with a debt to equity ratio that has constantly been under 0.6 in the past decade. However, it must also be noted that during the same financial period BlackBerry’s free cash flows plus cash & cash equivalents have been significantly lower than the debt that they have accumulated.
Revenues
Over the past years BlackBerry’s revenues have been consistently declining. In 2019, the Canadian company generated $1.16B in revenues, but in the following years it continued to decrease to $912M, then $708M and finally $650M in 2022.
BlackBerry Stock Over the Years – Review
Due to high debt and large fluctuations in net income, Blackberry’s share price has fallen significantly over the past 5 years. Roughly, 5 years ago, on June 18, 2018, the price of BB was $12.19. As of market close on June 14, 2023, it’s only $5.18, a total price decline of -51.51%.
Over the same period, net income has changed by an average of -1,723.13% per year. However, it is also important to remember that in the last 5 years we have gone through the recession caused by the pandemic and the current bear market in 2023, which has hit tech companies especially hard.
BlackBerry Stock in 2023
In the first half of 2023, BlackBerry’s stock has increased in value by over 56%, from $3.31 a share on the first trading day of the year to $5.18 per share (market close June 14, 2023). This performance can be explained by the current optimism in the technology sector, triggered by the recent development of Artificial Intelligence (AI).
Despite the recent rise in the share price, it is important to note that net income is expected to fall even further year-on-year to -$712 million, marking the second consecutive year of negative net income. Moreover, both return on assets (ROA) and return on equity (ROE) are projected to be negative by the end of the year, which shows that the current share price increase might be motivated only by enthusiasm and not by financial aspects.
BlackBerry Stock in 2022
In 2022, the core of the current bear market, BlackBerry’s share price fell nearly 65% from $9.38 to $3.30, wiping out all the gains made in 2020 and 2021. During the same period, total revenues fell 11.03% year-over-year, while net income dropped a staggering -6065.15% year-over-year. In addition, BlackBerry recorded a ROA of -34.81% and a ROE of -61.43%.
Just as the price movement in 2023 could be explained by market optimism, we could hypothesize that the price change in 2022 was definitely influenced and even amplified by the bear market, even though the deterioration of the underlying financials are a worrying sign regardless of the price movement.
BlackBerry Stock in 2021
The Canadian company’s stock has performed very well in 2021, with a 42.43% increase in price. This movement could also be explained by BlackBerry’s financial reports, as 2021 was the first year since 2017 that the company recorded an increase in net profit.
Although these results are far from impressive, BlackBerry managed to achieve a positive return on equity (ROA) and a positive return on assets ( ROE ) of 0.44% and 0.78%, respectively, in 2021.
However, it is important to note that in 2021 Blackberry outperformed both the Nasdaq and the tech sector of the S&P500, which have respectively scored a price increase of approximately 30% and 37%.
BlackBerry Stock in 2020
Despite the fact that we will remember 2020 as a very difficult year due to the pandemic, the stock of BB held up quite well and was able to close the year slightly positive. However, it is important to remember that immediately after the initial stock market crash caused by the pandemic, policy makers started to inject liquidity into the market, which led to an increase in the share price, especially in the technology sector.
BlackBerry Ltd. was hit hard by the pandemic, posting net income of -$1.16 billion, with an annual change of -675.08%. During the same period, ROA and ROE were -33.53% and -55.60%, respectively.
BlackBerry Stock in 2019
BlackBerry’s volatility is again confirmed by the stock’s performance in 2019. This year, the share price fell by an astonishing 40.99%, from $12.02 to $7.10 per share. Moreover, the net profit this year amounted to slightly lower than -$150 million, which is a change of -262.47% compared to the previous year.
In addition, ROA and ROE are both negative at -3.88% and -5.87%, even though they are much higher than in other years we discussed before.
How To Add Exposure To BlackBerry
Stocks
Nowadays there are many different ways to add exposure to a particular company. The most straightforward and easy way entails acquiring ownership of the company’s stock. This can be done on platforms like eToro, on which, with just a few clicks, you can become the owner of a part of the company.
However, shares are riskier compared to other ways of adding exposure to a company that we will discuss later. Shares carry the potential for higher returns, but they also pose heavy risks. Furthermore, acquiring only a single share doesn’t offer the advantage of diversification.
ETFs
Another way to add exposure to a company you like is through an exchange-traded fund (ETF). ETFs are basically a basket of securities that have been pooled together to be traded in the market and benefit from their diversification. The biggest drawback is that you can not control how much BlackBerry you own per share of the ETF. On the other hand, it is a safer investment than owning a single share.
Mutual Funds
Mutual funds are also a great way to benefit from the success of a particular company. Despite the fact that they are often confused with ETFs due to their similarity, there are many imporant differences that must be considered. For starters, mutual funds have the advantage of generally being launched and actively managed by companies such as BlackRock, Vanguard and others. However, despite these advantages, mutual funds also have their downsides.
For starters, they can not be traded as freely as ETFs, as many of them charge a “penalty” of up to 1% of the amount traded if you sell within 90 days of purchase, and also the trading price is fixed at the previous day’s closing price, rather than adjusting throughout the day. Finally, because mutual funds are actively managed, they often have higher fees compared to ETFs and stocks.
Options
A final way to add exposure to BlackBerry is through options. These are Contracts For Difference (CFDs) in which the investor benefits from the change in the price of the underlying asset without owning it directly. The main difference with, for example, owning a stock is that option holders do not actually own part of the business. Options contracts usually pool 100 shares of the underlying, allowing shareholders to open positions with a relatively small capital requirement relative to the position size.
On the other hand, it must be said that investing via options is a very complex strategy due to the nature of these CFDs. It’s a strategy that should be reserved for only the most experienced.
Let us now give you an example of how you can add exposure to BlackBerry through eToro, one of the most popular brokerage platforms.
How to Add Exposure to BlackBerry Through eToro
You can add Blackberry stock to your portfolio through various stock exchange platforms or online brokers. However, it is essential to consider fees, taxes, and investment instruments. We will use eToro, due to its popularity, as an example.
Step 1: Open an Account
The first step is visiting the homepage of eToro, click on the Sign-up button and in a few seconds the registration page will load. Then, you will need to enter your name, email address and password.
It is important to note that for it is also possible to either use your Google or Facebook account.
Step 2: Upload ID
In this step, you must verify your identity. Users must upload a proof of identity (POI) and an address (POA). The POI can be a ID, a passport or a driver’s license, whereas the POA must contain the user’s full name, address and date. However, for the document to be accepted by the system, it shouldn’t be more than three months old.
Step 3: Make a Deposit
After your account verification process is complete, you will need to fund your profile. To do this, open the eToro menu and click on the Deposit Funds button. Then, you will only have to decide the amount to be deposited in your account and the funding method.
Step 4: Search for BlackBerry
To search for BlackBerry stock, type BlackBerry’s ticker symbol (NYSE: BB) in the search bar. However, if you do not know the stock’s ticker, simply enter the first few letters of the company’s name.
eToro is intuitive and quickly shows you the most popular results.
Step 5: Add BlackBerry to Your Portfolio
After selecting BlackBerry, you can easily add the stock to your portfolio through eToro. After clicking the Invest button, you can choose how much money you want to invest or how many BlackBerry shares you want to acquire.
Finally, once you press the button, you will be able to see your newly acquired asset in your portfolio.
Summary
In summary, our impression is that BlackBerry’s performance has been extremely inconsistent in recent years. Although some of this could be explained by the rapid shift from quantitative easing and optimism to monetary tightening and pessimism, both the volatility of the stock and the deterioration of financial metrics are undeniable.
However, if you are truly optimistic that the stock will rise over the next few years, then you can opt for one of the popular methods we just discussed to add it to your portfolio. It is important to choose the strategy that best suits your investment style and needs, keeping a close eye on the risk of each position.
FAQ
Will BlackBerry Stock Go Up?
It is difficult to say because market optimism can really push the price of a stock much further than what it is explainable by its financials. On the other hand, the financial statements are showing worrying signs.
Why is BlackBerry’s stock so volatile?
The volatility of this stock is amplified by two main factors: the current optimism in the tech sector and deterioration of the financials of the company. The market optimism pushes the stock price upwards during years of monetary easing, but then if the when financial statements show worrying signs, the stock price plummets again.
Will BlackBerry’s net income increase in 2023?
The company is on track to report an even lower net income compared to the previous year, amounting to -$712.49M. Additionally, also the net margin is expected to plummet to -327.81% by the end of the year.
StockHax strives to provide unbiased and reliable information on cryptocurrency, finance, trading, and stocks. However, we cannot provide financial advice and urge users to do their own research and due diligence.
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