Blackberry shares rise after financial results are better than expected

(December 21) The Canadian-based technology company BlackBerry Ltd shares had one of their best days in months following better than expected financial results.

BlackBerry shares rise

On Wednesday, BlackBerry shares spiked 11.6 percent or $1.62 to close at $15.59

The company announced an unexpected net profit and also revenue above the estimate of analysts.

John Chen, executive chairman, claimed that the company was making good progress towards being a key software supplier for autonomous vehicles an area that he sees as a key growth opportunity for the company.

The company once was known primarily for its smartphones which were very secure. The company is named after the BlackBerry phones. Originally the company with headquarters in Waterloo Ontario was known as Research in Motion (RIM).

Blackberry is changing its product mix

The company is trying to reposition itself as a cybersecurity, software, and intellectual property supplier. It is working with many automotive industry's major chip makers and parts suppliers.

Blackberry phones are now manufactured, designed and marketed by TCL Communication (Blackberry Mobile) for the global market. BB Merah Putin serves the Indonesian market and Optiemus the Indian market.

The announcement that the company was no longer to produce its own BlackBerry phones was discussed in a September Digital Journal article.

BlackBerry famous for its mobile phones

BlackBerry was formerly a key player in the smartphone market. It was well known for its security features. At its peak in September of 2013, BlackBerry had 85 million subscribers globally. However, BlackBerry was unable to keep pace with Android and Apple phones.

By March 2016 subscriptions fell to 23 million. In the fourth quarter of 2016 only 207,900 BlackBerry phones were sold..

The financial results

BlackBerry has been experiencing financial difficulties for some time now. In the most recent quarter it lost $275 million. This includes a payout of $149 million after it lost an arbitration with Nokia.

On a positive note, excluding the Nokia payout and other items the company had a profit of $16 million or three cents a share. This result was better than analysts had predicted. They thought that the adjusted earnings would break even.

Revenue was higher than predicted as well on the quarter at $226 compared to an expected $214.6 million.

Revenue from handheld devices continued to decline as the company change its emphasis. The revenue from this source dropped to just $9 million from $62 million. Revenue from system access fees also dropped to $27 million from $67 million.

However, the revenue from software, services, and licensing rose to $190 million a record and up from $160 million last year.

New developments at BlackBerry

CEO Chen said about the company's work with many auto chip manufacturers and parts suppliers: "They have engaged us to provide them a BlackBerry operating system for the car that is high on safety and security." He noted that a modern car has more lines of code than an airplane.

BlackBerry has developed about 12 different software modules beyond infotainment systems.

As an example, the company has modules that guide lane changes with advanced driver assistance. It also has modules that connect the vehicle to wireless networks. It also shows how the various systems are functioning through virtual cockpit displays.

Over time, the company's revenues should increase. Chen said: "Some of the design wins we had last year will turn into revenue in 2019 and the wins that we are having right now are going to turn into (revenue) in 2020.".

Just last week, he company has announced a partnership with Denso Corp a Japanese-based company that is one of Toyota's technology suppliers. The two will develop an integrated platform for co-ordinating human-machine interfaces.

The company now has 1,200 software sales people out in the field and a number of government agencies are renewing contracts for their software assuring the company of a revenue stream.

CEO John Chen said: “We really do have a lot of people that want to do business with us,"

Previously published in Digital Journal

As interest turns to other cryptocurrencies bitcoin price falls

(December 20)Bitcoin appears to have topped out as excitement about the first two future exchange launches fades and attention turns to other cryptocurrencies particularly bitcoin cash.

Bitcoin price declined several thousand from recent high

The price of bitcoin has declined well over $3,000 from its recent record high of $19,783 back on December 17th. Over a recent 24 hour period the price of bitcoin declined by 4 percent.

Trading volume jumped to more than $19 billion.

The large volume indicates that the decline could continue into the weekend as there is perhaps a strong sell-off with profit-taking.

Present prices of bitcoin

At 21:32 UTC (Universal Consolidated Time) the price of bitcoin was $16,368. Of course it could be much different by the time you read this. Its opening on December 20th was at $17,608 and its low so far was $15,517.

While the price has recovered considerably from its low, it remains well below its open and over $3,000 below its recent high.

Causes of bitcoin drop in price

Money seems to be flowing from bitcoin into other cryptocurrencies particularly bitcoin cash. This is prompted to a considerable degree by bitcoin cash being listed and fully supported on the Coinbase exchange.

The listing of bitcoin on two futures exchanges has increased interest in other cryptocurrencies including bitcoin cash.

Bitcoin cash and litecoin are seen by some analysts a alternatives to bitcoin as both have faster transaction speeds and lower fees.

As suggested in the appended video, perhaps "the whales", very big players, are selling and taking profits to buy back in later at a much cheaper price or alternatively investing in other cryptocurrencies.

Future outlook according to chart analysis

According to an analysis of the price chart of bitcoin the sell-off could run out of gas about the $11,000 level. So far there is no sign of the bitcoin price declining to that level.

The high of just under $20,000 is likely to remain such at least in the short term.

If the price of bitcoin closed above the 5-day moving average of $18,680 this would indicate a sharp recovery and a possible spike up above $20,000. However there is no sign of that as yet. There is some recovery but not enough yet to reach even $18,000.

Investigation of insider trading of bitcoin cash

Coinbase has announced that it is launching an investigation as to whether any of its employees violated its insider trading rules. There were widespread accusations on social media that some employees tipped off others in advance that the listing on Coinbase was to happen allowing them to buy bitcoin cash before its sharp rise in value.

The issue is also discussed in a recent Digital Journal article.

The controversy and the suspension in trading may help bitcoin recover from its sharp decline.

Previously published in Digital Journal