Talking Numbers - CNBC | Yahoo Finance

Sponsored by
Talking Numbers

Why BlackBerry is the next Palm

Talking Numbers

As BlackBerry decides against selling itself, will the company suffer the fate of former rival, Palm?

BlackBerry is in the midst of a shakeup but is it really a death rattle?

The Canadian company once known as Research In Motion announced Monday that it is nixing a $4.7 billion buyout by Fairfax Financial. Instead, it is going to try to raise $1 billion by offering a convertible note. As well, the company is going to make some major changes in its leadership. One of those leaving will be CEO Thorsten Heins.

(Watch more: BlackBerry shows CEO Heins the door, abandons Fairfax buyout)

BlackBerry is saying this is "a vote of confidence" in the company's future. The markets so far seem to disagree. Before the stock's trading was halted Monday morning, shares of BlackBerry dropped nearly 19%. The company's market capitalization is now $3.4 billion. Its stock has lost 95% of its value since June 2008.

The current situation at BlackBerry is eerily reminiscent of another device maker from not-so-long ago. A Palm personal digital assistant (PDA) was once the must-have for Type A middle managers at the turn of the millennium. However, Palm found it tough to compete when other manufacturers came up with their own operating systems and included telephony with their PDAs. One of those competitors was Research In Motion and their BlackBerry devices. Pam was ultimately bought by Hewlett-Packard for $1.2 billion in 2010, close to half of its value four years before.

(Watch: BlackBerry has run out of time: Former HP CEO)

Though BlackBerry was considered the pioneer in the smartphone segment, its attempts to take on tech giant Apple and devices running on Google's Android operating systems have fallen flat. Its Z10 and Q10 smartphones, released earlier this year, didn't sell as much as the company had hoped.

Talking Numbers contributor Richard Ross, Global Technical Strategist at Auerbach Grayson, believes that even BlackBerry's stock chart today looks like that of Palm's in 2010. "Today, [BlackBerry's] stock does find some support back where we bottomed last year in September, around $6" says Ross. "I could see maybe another dollar or so upside but you're just looking for a greater fool to come in and see value where the market doesn't see it. For me, that's not where I'm putting my money."

CNBC contributor Gina Sanchez, founder of Chantico Global, sees BlackBerry's corporate customers as leaving. "Their biggest market was selling into the corporate enterprise sales market so that whole companies were buying BlackBerrys," says Sanchez. "Now you're seeing companies like Morgan Stanley stepping back from that commitment."

While she believes the stock may well go down from here, Sanchez does not think all is lost. Besides intellectual property, the company does have one product that may live on long after the company itself.

To hear what BlackBerry product Sanchez believes can survive and to see Ross' charts comparing Palm to BlackBerry, watch the video above.

More from Talking Numbers:

Why you shouldn’t wave the white flag on gold just yet: World Gold Council
Why Obamacare is good for health care stocks
Liked 2013? Why 2014 could be better: The case against a bubble

Rates

View Comments (9)

Recommended for You

  • Obama admin. says health subsidies will continue

    WASHINGTON (AP) — A federal appeals court delivered a potentially serious setback to President Barack Obama's health care law Tuesday, imperiling billions of dollars in subsidies for many low- and middle-income people who bought policies.

    Associated Press
  • What a Marijuana ETF Would Look Like

    The changes taking place around marijuana for medical use and for recreational use are the biggest in almost everyone’s lifetime. There are quite literally billions of dollars up for grabs for those who ...

    24/7 Wall St.
  • CEO: Rivers to quit Clippers if Sterling stays

    LOS ANGELES (AP) — The interim CEO of the Los Angeles Clippers testified Tuesday that coach Doc Rivers told him he will quit if Donald Sterling remains the owner of the team.

    Associated Press
  • We Paid Off $90K of Debt in 4 Years

    One couple went into debt to give their son the education that he needed, eventually owing nearly $90K on credit cards. Here's how they paid it off.

    Credit.com
  • China food scandal spreads, drags in Starbucks, Burger King and McNuggets in Japan

    By Adam Jourdan SHANGHAI (Reuters) - The latest food scandal in China is spreading fast, dragging in U.S. coffee chain Starbucks, Burger King Worldwide Inc and others, as well as McDonald's products as far away as Japan. McDonald's Corp and KFC's parent Yum Brands Inc apologized to Chinese…

    Reuters
  • U.S. housing turning the corner, inflation creeping up

    By Lucia Mutikani WASHINGTON (Reuters) - U.S. home resales hit an eight month-high in June, suggesting the housing market was gradually regaining momentum and would help the economy to stay on a higher growth path this year. The third straight month of home sales gains, reported by the National…

    Reuters
  • Play

    How to Build Your Own Annuity

    Instead of paying an insurance company, financial advisor Allan Roth recommends building your own "indexed annuity" that protects principal while giving market upside.

    WSJ Live
  • Airlines ban flights to Israel after rocket strike

    JERUSALEM (AP) — A Hamas rocket exploded Tuesday near Israel's main airport, prompting a ban on flights from the U.S. and many from Europe and Canada as aviation authorities responded to the shock of seeing a civilian jetliner shot down over Ukraine.

    Associated Press
  • Detroit retirees back pension cuts by a landslide

    DETROIT (AP) — A year after filing for bankruptcy, Detroit is building momentum to get out, especially after workers and retirees voted in favor of major pension changes just a few weeks before a judge holds a crucial trial that could end the largest public filing in U.S. history.

    Associated Press
  • Goldman Sachs: Here Are 25 Small-Cap Stocks to Buy

    While Goldman Sachs is cautious on small-cap stocks due to valuation concerns, the firm still finds some pockets of opportunity among individual names within the group.

    The Wall Street Journal
  • Herbalife Plummets

    Herbalife shares were down as much as 11%...

    Business Insider
  • New India government urges changes to World Bank

    India's new government has called for reforms to the World Bank structure to reflect the "emerging" clout of developing nations in a meeting with visiting bank chief Jim Yong Kim. The government, which took office in May, said in a statement late Tuesday that Finance Minister Arun Jaitley stressed…

    AFP
  • Microsoft profit hurt by Nokia, but revenues jump

    Microsoft said Tuesday profits took a hit from its newly acquired Nokia phone division but that revenues got a strong lift from cloud services. The US tech giant's new chief executive Satya Nadella said the results suggested that Microsoft's shift to services amid declining personal computer sales…

    AFP
  • Beef pollutes more than pork, poultry, study says

    WASHINGTON (AP) — Raising beef for the American dinner table does far more damage to the environment than producing pork, poultry, eggs or dairy, a new study says.

    Associated Press
  • Play

    U.S. Stocks Open Lower

    U.S. stocks kicked off the week in a decline, as investors paused following last week's run to record highs. MarketWatch's Victor Reklaitis joins Paul Vigna on the News Hub with the details, plus which stocks to keep an eye on. Photo: Getty

    WSJ Live
  • JetBlue pilot among 6 arrested in Boston drug bust

    BOSTON (AP) — A JetBlue pilot from Florida is among six people arrested by Boston police over the weekend in an investigation of drug dealing incidents near the Boston Common.

    Associated Press
  • How to avoid the biggest 401(k) mistakes

    Avoiding these four common, but serious, 401(k) mistakes can mean the difference between a great retirement and a shaky one.

    MarketWatch
  • Rebels release train with bodies from downed jet

    HRABOVE, Ukraine (AP) — Bowing to international pressure, pro-Moscow separatists released a train packed with bodies and handed over the black boxes from the downed Malaysia Airlines plane, four days after it plunged into rebel-held eastern Ukraine.

    Associated Press
  • 6 Money Lessons You Should Have Learned Before College

    In a matter of weeks, the class of 2018 will be...

    Business Insider
  • China's Xi eyes increased investment in Cuba

    Chinese President Xi Jinping met his Cuban counterpart Raul Castro in a visit to expand investment in the fellow communist nation, his last stop on a four-country Latin American charm offensive. Cuba, the only one-party communist state in the Americas, began opening up its economy in 2008, but has…

    AFP