Can BBM be worth $5 per share to BlackBerry’s valuation?

By Chris Umiastowski on 9 Sep 2013 03:45 pm EDT

This morning one analyst published a quick report suggesting that BBM could be worth $5 per share in BlackBerry’s valuation. Considering the stock trades at just over $11 as I write this, and considering that I don’t think the stock incorporates any value for BBM in the price, it’s decent upside potential.

In his research note, Gus Papageorgiou from Scotiabank suggests that BlackBerry may be able to grow its user base from the current 60 million to 250 million within a year. His logic is simple enough. WhatsApp claims to have 250 million active users, and they are now a paid application. BBM, on the other hand, will be completely free and have more compelling features.

WhatsApp claims to have 250 million active users, and they are now a paid application. BBM, on the other hand, will be completely free and have more compelling features

Papageorgiou thinks BlackBerry should be able to monetize the user base through ads just as Twitter does, and presumably just as Facebook does (and Instagram will). He suggests BlackBerry could bring in $300 million per year, which honestly doesn’t grab me as much of a stretch since it would be just over $1 per person per year.

At $300 million per year in advertising revenue, Scotiabank calculates this would contribute about $0.42 in earnings per share (EPS) and be worth $5 per share (that’s about 12x earnings).

In July I wrote about the potential value of BBM. Based on valuations of other social networks I suggested that if BBM can reclaim its throne and be the king of mobile IM, with 200 million users, it’s possible the network could be worth $10 billion. Papageourgiou’s numbers are far more conservative than  mine, implying a value of only $2.7 billion. This is because he’s looking to quantify what I will call “real world business value”, i.e. value that comes from revenue and cash flow. I was doing a rough calculation of what BBM could be worth based upon other leading social network valuations (and acquisition prices).

Either way, it’s very clear that BBM won’t ever come close to these valuation numbers unless it grows its user base very significantly in the next year. And to do this they need to get the iOS and Android versions out there. The company has officially confirmed that the iOS version was submitted for approval two weeks ago, and the Android version doesn’t require approval. So I guess they’re waiting for Apple’s approval in order to be able to hit the stage with a big bang, and announce availability on both platforms at once.

I hope they’re putting some serious marketing dollars behind this launch. This is something WhatsApp likely can’t afford to do, given their private company status. BlackBerry has a balance sheet to support a big launch.

I hope they’re putting some serious marketing dollars behind this launch

When the iOS and Android versions launch, it’s clear that their UI will be very much like the BlackBerry 10 experience as opposed to making the app look and feel like other iOS or Android apps. I’m not sure if this will help or hurt. I’ve heard people argue it both ways. I like the BB10 UI, but if I was an iPhone owner I think I’d prefer they fit the user interface that I would be used to in iOS. But I can also see why BlackBerry wants people to get comfortable with their in-house UI, making the switch to BlackBerry feel natural should customers consider switching.

As a reminder, Papageourgiou is not the only analyst bullish on BlackBerry because of the multi-platform BBM project. Ed Zabitsky of ACI Research slapped a $20 target price on the company earlier in July, and despite his bearishness on BlackBerry 10, the upgrade and lofty target were entirely due to the possibilities of BBM on the other platforms.

As for me?  I’m still 100% convinced that somebody is going to dominate over the top (OTT) communication. Skype isn’t ideal on mobile devices. Voxer only does voice. WhatsApp is big, but mainly a text chat app. BlackBerry Messenger does everything I want (except push to talk), and is moving cross platform. If it can gain a big base of users, I think it has a real chance of dominating OTT communication on mobile. That’s a battle worth fighting like hell to win.

Topics: BBRY BBM Editorial

Reader comments

Can BBM be worth $5 per share to BlackBerry’s valuation?


I will never understand how valuations are formulated when it comes to tech assets. So much speculation involved. $5 for BBM? $11 for BlackBerry? Nokia hardware sold for how much?

It's over my head.

Posted via CB10

The valuations are more speculations. It's more what people are willing to pay and how good the hype is.

I think BBRY is already doing a big mistake not releasing a Windows Phone version. BBM4ALL is already a failed expectation. With a proven track-record in not delivering, I'm sure BBRY can mess this up too and lose against Whatsapp. I hope it will be a success but I was thinking the same about BB10 and I dont have much faith in BBRY management team at the moment.

I don't know one person with windows phone. Don't waste resources on it at this point. Perfect the ios and android versions and when resources are available start windows phone.

I don't know about windows phone but they definitely should have a PC/Mac option in the works.

Posted via CB10 from my Z10 or PlayBook!

+1000 If they make desktop versions to go along with mobile then they have a great chance to be #1

Posted via CB10

I see quite a number of Windows Phones circulating in Europe and none of BB10 unfortunately.
Lots of people will still have to use Whatsapp because they have a number of friends that bought a nokia.

Isn't that the mentality in the app development community regarding BlackBerry? Isn't that one of the main reasons the company and platform are in the situation they are?

I know at least ten people with Windows Phones and have seen dozens of other people with them. Keep in mind that I don't know all that many people with smartphones.

Q10 and Canadian all the way! Posted via CB10 on

I don't think that BBRY is ignoring the Windows Phone. I think their might be other issues here. Remember that a few months ago Nokia released their latest Asha phones that have a dedicated WhatsApp button. These are more like feature phones for places like India and Africa and apparently they sell well. So there maybe something else at play here. Also, I think that BlackBerry does not have the resources to do something right now on Windows Phone. I live in Canada and I've only met one person ever with a Windows phone. I actually thought it was pretty good. It is heavy and well made for the cheap price. But the UI is a learning curve (sort of like BB10 was or Windows 8 is ).

It just shows you how ridiculously low the share price is even after today's rise.

Bbm worth $5
Patents $4-$6
Cash $6
Hardware business $10 (would be $14 if they got something close to what nokia got)
MDM Business? $5
Bb10 business?? $5

Broken up it could easily be $40.

Posted via CB10

My opinion is:
Bbm worth $1 -$2
Patents $2-$3
Cash $2 -3$
Hardware business $4 - $5
MDM Business $9 - $10
Total at the most optimist expectation: $18 - $23

Bb10 goes with the hardware and also patents

We don't know exactly until the next earnings report how much cash they have. They could have burn some of it and also having to write off inventory and so on.

Posted via CB10

They are only worth what someone is willing to pay for them. Last year when BB10 was still the promise of the future, a group was in the $8B range. But they couldn't get all of the financing together for that much.

Now it's BBM that is going to be worth more than the hardware business???

BBM ????? $0 - $.50 (It will take time to build this Whats Apps is only worth $1B)
Patents $3B
Cash $2B - $0 (How much have they spent, how quickly are they spending it?)
Hardware Business $0 (are people buying BB10?)
MDM Business $3B - $0 (are people buying BES10, are subscribers growing?)
Others Divisions $1B

$8 - $9 Billion would be a good valuation - but a buyer is going to want a bargain, so sell price is going to be lower in my opinion - $5B - $6B. Close to $10 a share.

I don't think the hardware business is worth much - it doesn't make much. Also, given your valuation of $40 broken up, what do you think buyers will do? Keep it whole? No chance, as you've rightly pointed out, the parts are worth more than the whole.

Nokia ~7.2billion or about $14/share in blackberry equivalent shared. At $11 BBRY is just BBM at $5/share and $6/share in cash. Efficient market!

Posted via CB10

If BlackBerry channels kicks off BBM stock does have potential if they break into separate entity

Posted via CB10

I dont believe Channels have much potential to take off. It's another iteration of information that has already "channels" to be published: FB, twitter, Google+ etc.

I cant see an immediate value in BBM Channel as it is now.

BlackBerry is going to have to add the feature to turn off read receipts like imessage does. There's a reason many people have that feature off and they like that about it. Don't give people a reason not to use BBM when it comes out!

Ya that would be a good mentality for Blackberry to have, but they don't in a lot of stuff they do. I have a Playbook I still use daily, but yesterday I did a software upgrade to Android 4.2.2 on my Samsung Galaxy Tab2 and its so slick and impressive. Like getting a whole new tablet. I'm hoping BBM will workout the same way for Blackberry.

What is the point in having it if it can be turned off!! Will end up just as useless as receipts in Outlook. Personally that's the reason I use it and would hate for people to be able to turn it off.

Posted via CB10

Lol relax man I doubt they will well at least not any time soon wouldn't they of said something about that in 10.2? Also I'm sure there's a way around it so people can see who sent them a message but not open it at the same time

Posted via CB10

I am relaxed. I just know what my friends will complain about. And you could always just not open the message but people still want to see the message and not feel compelled to respond right away

That has been often discussed, & I think most people conclude that in the end not allowing them to turn off the "R" retains value that would be loss if they did. Simply put, the "R" would loose a lot of it's value if you couldn't be sure that the person on the other end has turned it off.......unless maybe if they introduced an "O" meaning that the person on the other end has his "R" turned off. That way the person will know that the msg may, or may not have been read.

Good point. A different letter for people that have it turned off is a good idea in my opinion. I just think there should be an option because I know people will complain about it.

The price per share in this article means nothing. It will depend of the valuation and the number of underlying shares. For me even 2,7 bnusd is quite expensive considering it is very uncertain that bbm will succeed on other platforms.

Posted via CB10

The only wall that they have to break through is Apple. Getting an app on Google isn't a problem.

Q10 and Canadian all the way! Posted via CB10 on

BlackBerry should launch on Android and not wait for Apple
They don't really have tha luxury of waoting
Get it out there! I can understand wanting to do a seamless marketing campaign but where will BlackBerry be if Apple delays and delays? Move blackberry? Launch!!!! Control your destiny versus letting someone else i.e. Apple. Do it now!!!!!

Posted via CB10

I read some where that they have sent the app into the android app store and apples app store but nothing yet. On a side note iv heard rumors that Apple is delaying it and plan to announce it tomorrow at their new iPhone event to take away bbms thunder? Oh yea I also read that BBM has launched in Africa on galaxy devices I think.

Posted via CB10

I'd be very surprised if Apple announced it at their iPhone event. It takes focus away from their own new product.

Hey, you know how we have iMessage... well you should use BBM instead!

Yeah, really don't see Apple doing that at all.

Posted via CB10

Or Apple quietly approves the app on the same day, and ensures that it gets lost in an avalanche of other news...'s not like anyone waits for BB10 apps to be ready before launching!! lol.

Launch it on Droid and let's get rolling...they wonder why people get frustrated..BlackBerry = WAIT on everything and media clobber them.

Same with many leaks that there is nothing left to talk about.

Apple and Sammy announce something and it available right away.

No marketing skills at BB...major fail there.

Agreed, and I know we all have short formed the brand to BBM but since Rim re-branded to BlackBerry, I think they should stick with the branding not refer to it as BBM in short but "BlackBerry Messenger", I don't think their is anything sweeter for BlackBerry than to have the Brand come up on every Android and IPhone in the world as they open BlackBerry Messenger. This is an incredible opportunity for BlackBerry to get its name out there.

Posted via the best Keyboard in Existence my Mo Fo Z10

+1 couldn't agree more! Launch and let apple take some flack. Let them simmer in douchery before thier 5 same launch.

It would be nice to see an app hit Android before Apple for a change lol. Especially an app that was and has been on BlackBerry for years before it became available on either.

Also, I think that the big market for BBM will be in places like Africa/India/Asia and these markets typically do not use iPhone because it is expensive. BBM will then hit big in places like Canada/US/Europe with relatives and friends in Africa/India/Asia. So Android is more important at least to start.

It is definitely worth that much, or better put, will be worth that much. Unfortunately for myself and all the other shareholders, I don't think we'll get an opportunity to benefit from it (i.e. Fairfax and co take it private)

$5 a share? Maybe. Depends how well BBM is accepted...if at all. When is the release date, anyone know?

I do know that its going to be nice for my Playbook to communicate with my Samsung, my wifes iPad mini and all my other Android and IOS friends...thats considering BBM gets released. It was supposed to be out in June and here we are in September, and still Blackberry Android and IOS are sitting on their hands. Come on guys people want this!!!

On the other hand I'm thinking it may never happen because everywhere I look on line everyone is hating on Blackberry wishing they dissapear. Pretty screwed up.

As far as I know Apple only gets it on the Iphone, so no go for your Ipad.

Q10 and Canadian all the way! Posted via CB10 on

Wait a minute, your PlayBook communicating via BBM? Not unless you're doing it through Bridge (and therefore not Bridged with BB10?)

Or are you talking about using the PlayBook Video Chat app? In which case, BBM video is not yet arriving on other platforms, so no luck there yet either.

Well I was hoping to use the BBM video chat on my Playbook with my Samsung and my wifes iPad Mini. But just read its not on iPad just iPhone. This is so depressing not to be able to use my Playbook to communicate with the rest of the world. I love my Samsung Galaxy Tab2 but it doesnt have that ''magic'' the Playbook has.

after the consumer start does it move into the enterprise space? communication overlay beginning and then development to platform. looking to capture the Salesforce model and have the application ready by the time there is demand

I am a bit concerned about the UI aspects of it all as most people don't care to learn and can just go to "what works" for them.

With that being said though if they can push this out in a way that everyone learns to be more comfortable with BB10 this can be a big success for BlackBerry and BBM

Posted via Z10

"I hope they’re putting some serious marketing dollars behind this launch"

What.? Who? Alicia keys?

Lol. As if. Only if the current regime has nothing to do with this.
Then we might see actual marketing.

Posted via CB10

Sure they can. They just can never figure out the parade route goes over a cliff.

Every. Time.

But... whatya expect when the marquee super bowl ad tagline is about what the phone "can't do"?.

Posted via CB10

Just look at people that say companies are worth billions and trillions like face book and other companies that dont make a thing. Then you have companies that make and sell stuff and they get beat up becasue their revenues were short by a few million and they then say sell becasue they missed their numbers.

These analyst have no clue how to run a business all they see is that they make tons of money so the company must be worth many zeros and companies dont make anything except snoop into our information and say they are worth so much money. Lets see these analyst run a business and make a product and make a profit. Its all a fricking game for them to get us to bite andthrow money at a company then on the back side they are shorting the stock. The stock market is a total scam but what ya goign to do


You and me both, friend... You and me both...

They need to have a complete product and no delay. So they are already in a bind as the cross platform version as far as I know does not have video chat or screen sharing which are killer features. This means that there is less incentives to switch from other apps. It would be much better to show off the full pkg versus watered down version. Should be out soon though! I saw both running on ios and android at the TIFF booth. I hope this is the beginning of the rise from the ashes!

Posted via CB10

Let's assume all of the current 60 million users invite just 5 friends to join BBM...that makes 300 million users.

BlackBerry should offer current BlackBerry users a reward /incentive for every iOS or droid user we bring App World credits or something.

If they did this they could get to 300 million overnight!!

Interesting idea. It might work, but those rewards would cost them money. But it would sure propel them forward.

Q10 and Canadian all the way! Posted via CB10 on

+1 great idea! I want some head hunting swag!

Posted while peeking and flowing on my incredible BBQ10!

Chris...the biggest issue is that Gus and CB community is under estimating inertia required to move people from Whatsapp...It's like a contact book for lot of people and it would not be easy for BBM. Plus Gus has a known bias towards BBRY..the guy had 5 M figures for Q1.

However if BBRY is willing to take it seriously and aquire whatsapp or Kik I think they have real shot of bring in big league like Twitter or Facebook...But without a big effort from BlackBerry, BBM may not have enough weight to pull this off from whatsapp.

Posted via CB10

I honestly can't understand the point of launching BBM without video that compares in quality to apples facetime. I think that will just give the apple bigots another laugh and then when the video is added a couple of months later (if on time) they will have moved on and may not give BBM another look. Am I wrong?

Posted via CB10

BlackBerry is just stupid. They don't even know what they r doing rite now. EVERYTHING is ridiculously and unbelievably in a wrong path. F they don't wake up and have a revolution change in the company, they will dead instead of going private or being bought.

Posted via CB10

There are currently 17 BBM "apps" on Google Play...

Train wreck of an App enviroment.

Get the real one up there and let's go FFS!!

What is push to talk? Basically a telephone through BlackBerry Messenger?

Q10 and Canadian all the way! Posted via CB10 on

As BBM user I would say yes because the is already 55 million users worldwide and with the new BBM channels it has the ability to be used as a social media it's like combining twitter Facebook and whatever texting app all into one

Posted via CB10

Every one of us (around 40-50MLN active users) needs just to "force" 4 friends to use BBM on their I-phones / Samsungs and the 200MLN users are there!!! Hopefully BBM x-platform will be relatively bug-free and it will not be that hard!!! Go BlackBerry....!!!!!!

I'm sorry -- what more valuable features does BBM have that WhatsApp does not? Voice, video and screenshare don't count because they will not be cross platform, or by time they are, WhatsApp is likely to have them as well. And frankly, voice and video can be done on Skype for free now too.

Some us like our messaging apps to work at least 95% of the time. My experience with Whatsapp has not been that great. Thats just the UI and basic functionality, never mind how its organized. Not only that, some people don't like to upload their whole phonebook to WhatsApp servers and anyone who has your number can see your profile and message you. And Skype is fast becoming a joke, ruined by King Microsoft.

The groups feature is way ahead of anything else! It's more than just group messaging, its like a mini private facebook where you can add and comment on pictures in the group, add appointments and reminders for everyone at the same time and lists to.

Posted via CB10

I also think BBM needs a windows phone app. You need to be able to message everyone. That's why WhatsApp is winning.

Posted via CB10

Why is BlackBerry so silent and dormant after all these articles and news? Why are all of us getting everyday more and more frustrated with these sounds of silence? Why BlackBerry? Please send us sign pay some attention to these last berry warriors. We are the last believers. BlackBerry is supposed to be a communication company so please communicate. Don't let our hope fall down. Wake up and do what you are supposed to do: communicate. It's marketing and communication, stupid!

Sent via my Z10

Just market the dam thing and show the damn differentiating features! Just once in the history of the company I would like to see that.

No more flying carpets. Show people what you got BlackBerry!

Posted via CB10

Chris isn't Push To Talk a given, its been always on Blackberry so slight modification to Push + leave message + done

Oh, if Gus says, it must be so. I always listen to dudes named Gus, just because they say stuff.

Posted via CB10

what would be nice is the BB10 PTT can convert it to text to get the jist of the message, that would be nice

there's probably more but here are some must haves in order for BBM to be accepted by non-BB users:
1) add posted group pictures inline with chat activity (not separately in its own section)
2) add ability to share other file types (not just pics) ie. vid, documents, etc.
3) add jump-to-latest unread msg in group chats
4) add PTT ability
5) BONUS for BB only: add holster notification profiles like in BBOS so it can vibe in holster and ring out of holster

BBM going cross platform is going to be awesome. Hopefully they can market their phones big time on BBM

Posted via CB10

Right now BBM is not worth much at all, much less than $5 per share. I have to assume BBM will fail until BlackBerry proves it can be successful. It is already set to fail IMO as it is launching with a limited features compared to the BB10 version. I think it will be flop city, sorry to be negative.

So sad to see... the once throw away appendages (BBM and BES) are now looked at as the main assets of this company.

RIM (Now BlackBerry) never gave much thought to them for years... when it was their real strength. They had NO competition! Now What's App and MobileIron and the like have pushed BlackBerry to the side.

What a great run. But.... :-(

Why can't bbm incorporate push to talk right now? It has voice notes, what would be so difficult to add ptt?

Posted via Z10

Now that the apple event is tomorrow, I think blackberry will probably hold the announcement till next week. They don't want to share the attention with the new iphones. They still have till Sunday 22 to bring cross platform bbm to life and don't break their promise.

Posted via CB10

I don't understand the waiting game... best to get it out first on any platform rather than both the platforms...

Sent by Bbry Zed10

Chris, I had a feeling your next blog post would be about cross platform BBM. Apparently there's nothing else going on in the business of BlackBerry right now.

Anyhoo, the added valuation is attainable if BBM X is managed properly. BBRY has to meet deadlines with the additional features including video chat, screen share, etc. If in 6-10 months from now those features are not introduced, this cross platform product is toast. And we all know BlackBerry's track record.

My fingers are crossed for BlackBerry. I want them to succeed. They need cross-platform BBM to work in order to remain a viable company, IMHO.

Sounds like someone's done the maths. I'd say in real world terms, BBM adds about 4.5 dollars CAD to the share value.
This is good news as BlackBerry transitions to a private company.

What if BlackBerry made a phone under TAT or QNX that uses android. They already have the handset business. Seems like it would be cheap and easy just add some nice tat skins over android. The diehard BlackBerry fans get to keep our secure phones and everyone else gets android win win

Posted via CB10

BlackBerry Messenger can be a huge win and I think it would be a self defeating mistake to include all the features immediately.

Both Android and ios have video and voice of their own. So are less likely to accept another coming in and trying to undercut their own territory. Launch without these features get 200 million ios BlackBerry Messenger users then submit video and voice for approval. Neither Ios (or android for that matter) can afford to piss off millions of their own customers by sayin No, cause people will have got used to BBM and the BB10 UI so MAY leave.

Also limiting somefeatures to BlackBerry Handset creates exclusivity to the Brand.

As always marketing is key and the little things we do matter. Like sitting at my mums, skype is playing up on her laptop so I fire it up on my phone connect to my Aunt abroad and hand it to her. Or another friend who is deaf and loves her keyboard. Guarentee she will get 10+ BBM users on day 1.

BlackBerry do need to market this but we can do our part.

Posted via CB10

Regardless of the numbers, I agree, BBM as a multi platform messenger, is a battle worth fighting for. It could easily amount to survival of the company. BBRY is more than just a handset company.

Posted via CB10

I already have about 20 family and friends ready to download the BBM app for their Android and iOS devices. Hopefully now that I have their interest, blackberry doesn't take forever to bring this to market where they lose interest and pass on it.

Subscribe to Tri County Catering and Party Idea Channel. Pin #C00123065

For all those comparing to Face time on Apple..Facetime is got iOS only.

BBM is cross platform.
I am sure Video will launch soon after.

And BBM Channels /Money...

Like I said earlier..offer an incentive for current users to reel I'm non platform users..."BBM Bounty".

One Dollar app world credit for every 5 or 10 friends you bring in.

Wouldn't cost much and would grow it aggressively.

Or they could pay Alicia to tweet about from her iPhone.

Posted via CB10

Lol at "pay Alicia to tweet about it frim her iPhone"! Haha!

Posted while peeking and flowing on my incredible BBQ10!

Advertising for a instant messaging/social networking app?????

Seriously? Like, really. Are you serious?
I really just don't know what to say.

Tangent/ People just need to sit back and let BB do their thing. I know we like to think we have all the answers but we don't. We don't have any. We know far less than BB. Far far far less. The more we think we know and act like what we know is right the dumber we look. The ones thats constantly bash this company take it a step further and appear psychotic. Cause its just a phone right?

Is Blackberry charging iOS and Android for bbm talk & video cause they should it should be free only for BlackBerry users

BB10 all the way

Posted via CB10

I have to agree with this great article I have bought 1000 shares at $14 and added 1000 more at $9.20 also to enhance my profits 20 calls strike price $9. I was underwater but no getting my profit. BB10 devices are great. I dump my iphone and got my Z10. However, the big business is BBM Skype is terrible and was sold at 8 billions. Good news will come continuously as BBM and BES gaining traction and number of subs skyrocket. You will think I am crazy but BBM will worth around $15 per share within 12-16 month. Remember this post.

But Chris, BB10 won't be an OTT platform at launch. No BBM Voice, no BBM Video, and no channels on iOS or Android. You only have one chance to make a first impression -- no matter how much you spend on marketing -- and on first impression iOS and Android users won't see the app you think will win in the marketplace. Is that a mistake on BlackBerry's part?

Posted via CB10

I hope BlackBerry follows up quickly with voice, video and channels. Otherwise the adoption rate will be horrible and next to impossible to make up for it.

Still unknown at this time, wait a quarter after BBM release and see the number. IMO, there's not much reason for people to use another chatting app, unless it really revolutionise the way you chat.

Posted via CB10

At this time no investor will put a $5/shr. value on BBM. It has not proven itself on iOS and Android, it's leaking subscribers on BBRY, there is no revenue being generated off BBM, BBM voice/video/channels will not be available on iOS and Android at launch further hindering adoption on those platforms and failing to significantly differentiate (to the common lay person) itself from other messaging apps. Let's see in three or four quarters where BBM is at. Unfortunately by that time BBRY might be owned by private equity so we'll never find out how much BBM is worth.

2 weeks right? Why so long for apple to approve? Perhaps the approvers have a directive ie. "you need to find any and I mean any no matter how trivial of a reason to reject this app"

In my opinion, I think blackberry should have released BBM to other devices for a fee.

BBM is hugely popular on all devices now; if they charged $2.99 for the app, it may have helped with finances.

Posted via CB10