BlackBerry Ltd T.BB

Alternate Symbol(s): BB

Technology Software - Infrastructure

BlackBerry Limited is a Canada-based company, which provides intelligent security software and services to enterprises and governments worldwide. The Company leverages artificial intelligence (AI) and machine learning to deliver solutions in the areas of cybersecurity, safety, and data privacy and specializes in the areas of endpoint management, endpoint security, encryption, and embedded systems. It operates in three segments: Cybersecurity, IoT, and Licensing and Other. Cybersecurity consists of BlackBerry UEM and Cylance cybersecurity solutions (collectively, BlackBerry Spark), BlackBerry AtHo, and BlackBerry SecuSUITE. The Company’s endpoint management platform includes BlackBerry UEM, BlackBerry Dynamics, and BlackBerry Workspaces solutions. The IoT consists of BlackBerry QNX, BlackBerry Certicom, BlackBerry Radar, BlackBerry IVY and other Internet of things (IoT) applications. Licensing and Other consists of the Company’s intellectual property arrangements and settlement award.

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BlackBerry Ltd

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Post by Giuseppe1on Mar 12, 2013 1:13pm

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Post# 21116916

SA: A Warning To BlackBerry Bears

A Warning To BlackBerry Bears: Numbers Can Be Deceiving
Mar 12 2013, 10:55 | about: BBRY
Disclosure: I am long BBRY. (More...)

The goal of this article is to highlight how changes in the relationship between share price and short interest could indicate a potential short squeeze for BlackBerry (BBRY) shorts.

Short Interest Continues to Increase

Numbers seldom lie, and the general consensus is that the market is always right. An efficient market will price all relevant information into the share price. Except for when it does not (to our frustration).

For BlackBerry investors, one number that is grabbing their attention is 28%. This number represents the percentage of shares held short as of February 28, 2013. There are now 147 million shares that have been borrowed and immediately sold in the market, with the assumed expectation of a drop in share price. How investors interpret this number, could mean the difference between massive losses and massive gains.

A Very Expensive, Misleading Number from the Past

To get a feel for how misleading numbers can be, this article will first touch on a recent example: The infamous Volkswagen short squeeze that occurred in October 2008.

Just over four years ago, the number that eventually grabbed the attention of investors of Volkswagen (VLKAF.PK) was 31%. This number was the percentage of Volkswagen ownership that Porsche (POAHF.PK) had publicly declared it owned.

When Porsche publicly disclosed that they had significantly increased their position in Volkswagen, a massive short squeeze occurred. The market had priced Volkswagen with the assumption that Porsche had the long standing 31% Volkswagen stake. However, Porsche announced that they had increased this position to 42.6%, as well as another 31.5% in cash-settled stock options. This effectively raised Porsche ownership of Volkswagen to 74%. The consequence of this was immediate panic buying by Volkswagen short sellers, as this meant that only 6% of the Volkswagen voting stock was still floating in the market. The market had been "caught off guard" by this revelation, as Porsche was not required to disclose its cash-settled stock option position.