What’s really going on with Detwiler’s false accusations, and how BlackBerry is handling it beautifully

By Chris Umiastowski on 12 Apr 2013 10:44 am EDT

BlackBerry’s stock was hammered yesterday due to a report by research firm Detwiler Fenton, who claimed that Z10 devices were being returned in unusually high numbers.  From Wednesday’s closing price to the lows on Thursday, BlackBerry lost over $1.25 per share.  It closed at $13.55, down from $14.69 the day before, for a loss of nearly 8%.  

The claim seemed absurd, essentially saying that in some cases returns are exceeding sales.  I challenged this claim on Twitter, and I think anyone with half a brain who stopped to think about the claim realized it was neither logical nor worth repeating.  But the media is in the business of getting website traffic, and when a story like this hits the wires it spreads virally.  

Despite BlackBerry and Verizon publishing statements early in the day, geared to neutralize the negative headlines, the topic still dominated BlackBerry-related discussion yesterday.  

It’s one thing for a research firm to do actual quality research, publish the results, and benefit from the credibility of being accurate and first on an important topic.  It’s quite another thing to publish horribly wrong information without disclosing methods, or without performing a sanity check.  This is why so many people will immediately suggest that Detwiler is being paid by unscrupulous short sellers (hedge funds) to feed out a negative story and capitalize on the inevitable stock price drop.

It’s quite another thing to publish horribly wrong information

Let’s have a look at Detwiler, shall we?  They are small.  The equity research department is made up of 6 analysts.  That’s a tiny team.  They focus on supply chain “checks” and other sorts of channel-gathering information in order to supply this information to institutional buyers (and sellers) of stock.  They get paid by delivering information (packaged as research) to these institutional clients.  It would be too complicated to explain the mechanism for how they get paid, but it’s just a glorified version of clients writing a cheque for access to this “research”.

On BlackBerry, Detwiler is the same shop that said the Q10 would be delayed until June.  They also claimed that the recent 1 million unit order was from Brightstar, on behalf of Verizon, further suggesting that this move by Verizon takes inventory risk away from the large US carrier.  Naturally, this makes absolutely no sense and it’s immediately evident to anyone who understands this business that much of Detwiler’s “research” on BlackBerry has been horribly wrong and lacking logic.  

So what’s their real agenda?  I can’t say I would blame you if you drew a conclusion that these guys are purposefully publishing inaccurate research in order to support their major clients, who have shorted stock.  I’m not going to say it’s true, because I don’t  have any evidence to back it up.  But this possible explanation is sitting right there staring us in the face, and I can’t blame the people who think it’s worth exploring.

This brings us to today’s press release by BlackBerry.  They’re rightfully upset by inaccurate research being published, harming their stock price, and possibly harming the public’s perception of the Z10 and the upcoming Q10.  

Remember I worked as an equity analyst (sell side) for 11 years.  I’ve written negative reports, and plenty of them.  I’ve seen management teams get upset at me for these reports, and I’ve seen them get upset at other analysts too.

When a legitimate critical report is published, I’ve often seen sour grapes expressed by management by way of phone call to the analyst’s boss (the director of research).  The CEO or CFO calls the analyst’s boss and starts bitching about the report, often in an attempt to get the analyst fired.

Smart bosses know better.  When a CEO or CFO calls to complain like this it’s usually a case of “where there is smoke there is fire”.  

Smart management also knows better.  And BlackBerry fits into THIS camp.  Instead of bitching to the firm, they went straight to the SEC and Ontario Securities Commission.  It isn’t their job to fight this battle.  It’s their job to report what they may believe to be manipulative research.  

It isn’t their job to fight this battle. It’s their job to report what they may believe to be manipulative research

BlackBerry handled the situation beautifully.  They need to send a message.  That message is simple.  I’ll paraphrase it as, “If you have legitimate research, go ahead and publish it.  But if you dare manufacture false information to manipulate the stock, we’re going to put the proper authorities on your ass.”

Whenever I was working on a negative story and uncovered something I thought might be highly controversial, I would give a heads up phone call to the company in question.  It would not be legal to tell the company that I was considering changing my recommendation.  But a phone call to sanity check my information, not discussing anything about a possible recommendation change, would always be the right thing to do.  It’s a simple phone call.  “Hey, I discovered this [really bad news] and before I publish anything on it, I want to run it by you to make sure you can’t show me where I may be going wrong.”

When somebody publishes incredibly negative information on a stock, like Detwiler did, and refuses to discuss their research with the company either ahead of time or after the fact, and that “research” doesn’t even pass the smell test and turns out to be totally wrong, it definitely raises eyebrows.  

Good on BlackBerry for going after stuff like this.  Nice to see their new Chief Legal Officer, Steve Zipperstein, taking action.

Topics: BBRY Editorial

Reader comments

What’s really going on with Detwiler’s false accusations, and how BlackBerry is handling it beautifully


Good to see Blackberry taking action - Go NEW Blackberry

I'm still gutted I didn't invest in RIM when they were at their lowest - I kept threatening to!

+1. Agreed! Chris... Wonderful article!

I refreshed my knowledge on shorting with Wikipedia and noted it has been banned numerous times, and is still very controversial.

A Marketwatch article from March states BBRY shorting interests have grown by 20% and now are over 30% (at least those legally reported) which are far ahead of all other tech companies.

With so many people betting to profit on BBRY failure, is there no doubt false news and rumours are being spread? As a BBRY shareholder, can we tell our broker NOT to lend out our shares? If all BBRY stockholders told their brokers this, could we not drive away the short-sellers? Or is this not possible or not going to help?

Thanks for the clarification and commenting from experience. It is articles like this that helps the novice like me separate fact from fiction.

Very informative article, thanks for clearing this up. Hope they get what they deserve.

I already knew those claims were false considering the amount of interest I get when people see my phone.

Posted via CB10

Surprised by this. I ordered 20 preorder z10s from at&t and vzw and granted while early 0 hw complaints. Now compare that to our 99xx refresh we did late last year where we experienced a really high rate of trackpad failure. Wish techworld would give BB a chance instead of treating everything they do as a joke. We get it, if you write for a tech blog, you've probablly had 1 or more iDevices up your ass since 2006, good for you! Now stfu.

Sad thing is, this kind of BBRY stock price manipulation has been going on for some time now. Good to see BlackBerry finally taking steps to put an end to it.

Posted via CB10

Except I think this is the first time I've seen it go beyond negative opinion and guestimates that 'could' be right up to something that is just outright false and easily disprovable by the company

This is BS from Blackberry! They just can't face the truth! 75 % of the people in the US will never ever by a BB according to a survey! :(

I hope this was sarcasm... That poll that you referenced was also very flawed, they had a pool of 250 people! How on earth do you expect to get accurate results from only 250 people? To even get remotely close to getting valid polling data you need a WAY bigger pool than that... try adding 2 or 3 0's on the end of that 250. Yet another attempt to slander Blackberry.

That survey was done BEFORE BB10 launched in the US and 50% of the people surveyed HAD NEVER OWNED A SMARTPHONE OF ANY KIND.

That's excellent because if 25% do we will be laughing all the way to the bank. The US is important but not that important and winning 25% market share back would be huge so keep it going! Don't be so tunnel visioned BB is going to do very well!


Great article. I hope BlackBerry's action will make others think twice and carefully before making statements that undermine . Go BlackBerry!

Posted via CB10

Great Job BlackBerry...enough is enough...false reports like these cause real damage to the brand and product...Once you take the fight others will think twice before doing something like it..

Posted via CB10

BlackBerry's swift reaction here to stand up for itself made me proud. Good for them! It's about time!

More returns than sales.... so.... not only are all the sales being returned but contests as well? Where else would they be coming other than from sales to be able to return more than has been sold?

I am as big a BlackBerry fan as anyone, out of all my devices the Z10 is the one with my SIM in it more often than not. I also doubt the validity of the report but I can't believe how everyone can't understand that it IS possible for returns to be outstripping sales. Let me break it down for you all really simply:

Day one - sell 10,000 Z10s, Return 1000 - Net in field 9000
Day two - sell 10,000 Z10s, Return 2000 - Net in field 17000
Day three - sell 2000 Z10s, Return 10000 - Net in field 9000

So you returned more Z10s that were sold on day 3, and you can continue that trend until the only float in the field is what is sold one day to be returned the next day.

When a company like this goes after destroying confidence without backed up evidence is damaging and libel. BlackBerry has the capacity to deliver and is delivering a quality product. I have a Z10 myself, and it's the best investment I have made.

Posted via CB10

Huge story. Great to see BlackBerry taking decisive, appropriate action to defend their investors and their products.

Problem is we lose over 8% and gain back less than 2% after the response...Supports the activity of these types of firms. Blackberry needs a stronger shareholder base.

As long as the guy shows that some of the stores in his sample did have large returns, i'm not sure there is a case...obviously the headlines, etc. were misleading but not sure its enough to cause any serious infraction...Further, if the shorts didn't cover today, they are not particularly worried.

However the regulators will be able to see if the shorts did cover and that will add fuel to the fire.

The regulators can trace this back to the report if necessary.

I know how they can manipulate the results and show that there was more returns than sales. Imagine this scenerio.....I had a BB9900 and wanted to try the Z10 to see if I like the touchscreen. I have big, thick fingers and the touchscreen keyboard just doesn't work so I decide to return the Z10 before I go into the office. When the store opens at 9:30 am I go and return the phone. At 10:00 am Jeff Johnson goes into the store and ask how the Z10 has been selling. The salesperson says that I got a return but no sales yet. He goes to conduct this survey at 10:00 am to say 20 stores and if two or three stores has a return but no sales then he completes his survey to say that there were a number of stores that had more returns than sales but fails to provide details on what time the survey was conducted or to which locations. Its obvious if he goes to the store within 30 minutes after opening then there would be a high probability there would be no sales. This tactic can easily mislead the readers!

If this report is proved wrong, will anything happen to the company or the guy who wrote the report further than a slap on the wrist?

Posted via CB10

Very well done article. I hope BlackBerry makes an example of Detwiler Fenton. What a garbage report they put out. Simply an embarrassment.

Posted via CB10

I'd love to see the SEC impose a crippling fine on these guys. Probably won't happen, but at least BlackBerry has made the right moves. Thanks Chris.

Posted via CB10

A lot of the guys working at Detwiler Fenton are Canadians. Jeff Johnson, e.g., got a degree from York U.

Chris Umiastowski I thought you said in another article that ANALyst and traders have no relation with each other. I don't know which company you were an ANALyst, but such cases are becoming more and more frequent and ANALyst no longer are relevant and there only purpose these days is to manipulate the markets. No matter if their comments are positive or negative. I am sure you noticed how these analysts keep reiterating their rehashed sentiments over and over every day even though nothing really has changed in fundamentals. Why would anyone do that? You know why... IF I YELL LOUDER AND MORE FREQUENT, IT MEANS I AM HEARD MORE OFTEN.

Why the hell would you create a report for free for all public to see if you are not profiting from it. Wall St does nothing for free and I can understand you want to defend your ex-position but the reality is you guys are just clowns for the circus media like CNBC, BNN, BLOOMBERG to push an agenda for the highest bidder.

Detwiler is a research firm which gets paid for gathering then publishing information to their clients, this is the case with all research firms. Once a report goes out to clients, most of the time the info is viral and made public, especially in cases where there will be a major influence on the underlying stock and/or the markets as a whole.

There are traders who trade the news which are published by these "Research" firms. It's advantageous to the clients of the firms because they have the information before much of the public does.

If there is a relation between traders and analyst's, it's only for the advantage of early information, and that's about it.

the point here is the false information, from this Dinky Firm which affects the company. but hey, Cramer has touched this issue quote : " find some data , call the loser Wall Street journalist to spread the data point "

Don't condescend me with that nonsense.

There is no early information, all information is officially reported by the company to the public. Having information before the public means you have insider trading information.

I think you are confusing, access to private information with analysis of information that is already released to the public.

In this case, none of that is relevant to the topic at hand.

Alex - with all due respect, you're mistaken.  Period.  

The job of an analyst is, in part, to gather information from public or non-public sources and process it into a conclusion.  There are plenty of public bits of useful info that don't garner attention.  There are plenty non-public bits of information that are non material on their own.  Put enough together and you have a decision based purely on legally gathered info using good analysis or mosaic theory.  

Don't sweat it though ... most of the public has no idea what analysts do.

With all due respect? C'mon Umi...call it what it was...a very polite BITCH SLAP heard echoing through the halls of Wall Street!

Can someone say smack down?

LoL But seriously, point given and point made which was, as always, right on target. Good job once again Umi!!

Chris, I appreciate it's easy to see conspiracy around every corner.

But when it comes to BlackBerry there are interesting patterns around the stock. In particular the volume of analyst and other noise in the weeks preceeding "news".

The old buy on rumour sell on news adage reaches new heights with BBRY. The stock often falls dramatically immediately prior to a news event (such as when the Z10 was released).

I'm not saying there's a direct link between hedge fund selling activity and "analysts" or other bloggers, but it defies reason to suggest there's no correlation.

It would be wrong to accuse Detwiler Fenton of manipulative intent without full knowledge, but it looks pretty convincing from outside.

With so much cash riding on a failure of the Z10, surely even you would have to admit there are a billion or more reasons to generate negativity around the stock.

It's inconceivable that hedge funds who see the potential of significant loss wouldn't try to do something however trivial to try and help the stock on its way down.

Or are you telling me hedge fund staffers and analysts never drink in the same bar?


I guess everyone is just doing good analysis based on sound fundamentals right? No manipulation there.

Obviously I am exaggerating but not far from the truth, and I am pretty sure you encounter stuff like this daily as everyone who follows any particular stock.

I guess you missed watching CNBC BBRY ER day when they invited some analyst who couldn't care less that EPS was a blowout and was yelling at the screen to short the stock. lol

So why did you leave your position if you were doing such valuable work?

Why is it that just the U.S. analysts seem to do channel checks? I have yet to see a Canadian firm show that they have been doing checks in the various geographies.

"ANALyst no longer are relevant and there only purpose these days is to manipulate the markets."

This statement contradicts itself. I think the market is simply adapting to what "analysts" do. Market fluctuations are opportunities to make (or lose) money, regardless of the legitimacy of the driver. The big brokerages and funds are using their power to play these moves. Small investors don't stand a chance since they don't have the same resources to gather, assess, or manipulate data; we also lack the tools to execute fast, high-volume trades. Maybe it has always been like that, it's just that I pay more attention these days as a fellow gambler, er, investor playing the markets.

For those that are limited to long term plays (whether bearish or bullish), the analysts that actually sift through financials and look at data to provide a justified technical analysis of a company's are worth their weight in gold. Like Chris!

How many analysts do you know that got it right?

I estimated .14 cents beat for last quarter while majority of analysts were looking for EPS loss of .30 or less. Does that make me a better analyst than those pampered pricks? No but saying their worth their weight in gold is actually kinda ironic. Since almost every analyst was betting gold would do better with all the bad news around and yet its sinking like a ship.

You want to make money in the stock market. DO THE OPPOSITE of what everyone tells you. Follow the sheep and get slaughtered.

Worked for Warren Buffett, might just work for you.

Thanks Chris! Since starting investing BlackBerry I've enjoyed reading your articles on BlackBerry and giving a rationale explanation and breakdown of rumors/news and reports.

Keep it up!

Long BBRY.

I am impressed with the message that BlackBerry is sending to unscrupulous market analyst with these bold actions....we will no longer tolerate the reporting of false and misleading information for the purpose of manipulating the company's stock, the company's image, and product sales. Bravo BlackBerry!


I'm glad they have finally done something to counter the seemingly never-ending onslaught of negative press they get. Even when there is great news to report, somehow the bloggers and analysts still find some way to "spin" the news in a negative light.

As Thorsten and Zipperstien said, its one thing to have an opinion, but an outright negative (provable) lie is no longer opinion--its slander. And slander is illegal.

It's about time Blackberry took some action to quash these poorly "Researched" analyst reports. I hope these guys get lots of bad press if nothing else.

Posted via CB10

Thanks for the link. I was only able to read the first page as I wasn't interested in signing up, but what I read was quite insightful. I do believe there is collusion in certain places of power to keeping BBRY stock prices low. The thought of BBRY succeeding is scaring the bejeezus out of those shorties.

Was there anyone that thought BB would handle it in a different way? Of course they're going to deny the report. But since neither party has released any #'s it's pretty much a moot point.

Moot point? I don't think so. In the court of public opinion, it was absolutely important for BBRY to respond and especially so in the way they did.

but remember, BBRY can be sued for deliberately misleading shareholders if their version later proves to be untrue. They'd have a LOT to lose by coming out now with these statements

Jeff Johnston, CFA from detwiler fenton &co Profile disappears from LinkedIn and Company website, lol.

Yep the report was accurate alright lol. They already threw him under the bus.

I guess I was wrong as well ... I thought it was the water surrounding the castle! Glad I already got my shares in January! LoL

Great break down Chris...I'm tempted to throw it to BGR they have negative Blackberry stories daily!

I'm very happy BlackBerry take an action against this stock manipulator and I hope they throw them in jail for the lesson. It costs the poor man like me 5K paper loss yesterday.

Agree manipulation has been rampant. The negative story is just one piece of the puzzle. Short interests reinforce the negative sentiment with non arms length trades in the pre market causing the stock to open lower. All this acts as a Beacon summoning short specializing day traders who get ready to pounce on dips. Big short interests can seed the dip if investors hold their shares. Once the hurricane of short selling starts it feeds itself. Shares from new short positions are used to cover previous short selling. This short selling can continue and drive down the stock price even if the only selling is shorted shares. To understand how this can happen consider the following simplified example in a market with only two active traders. Two traders, A and B, each borrow 1000 shares to short. Assume selling 1000 shares of BB stock at market price (ie price will drop if no buy orders at current price) drives the price down by a penny. Trader A sells his shares at market price and sets up a buy order to cover at a penny below the price it sells at. Trader B then sells his borrowed shares at market price and also opens a buy order to cover a penny below the sale price(if there are no other buy orders trader B's shares will be sold to Trader A's open buy order covering his short position). If trader A reopens the same short position at the new lower stock price it will fill B's cover buy order, and so on. The stock price declines by a penny on each market sell order, but does not change on the buy at a lower bid price. So merely by continuing to trade these two thousand shorted shares back and forth these two traders can drive the price down indefinitely, and extract any amount of value they desire. At the end of the day they only have to cover the original 200 shorted shares and walk away with their money. In the real more complex market this can happen when short selling overwhelms normal trading as happened yesterday. Big short players know how to set this up. As you can see. The original negative story is only important as a tool to gather the short sellers to the short selling feeding frenzy.

Posted via CB10

Hopefully this will incite some of the short interest to get off the stock!

Thorsten has been very rational in the face of repeated bear/short attacks that use very questionable information. I was totally disgusted that this information was published yesterday. Shame on the media outlets like Barrons and All Things D for publishing it without even a hint of questioning the "facts" or how they were gathered.
The American media has no values left and are quick to jump on news without checking up on the facts.

The sad part is that many investors lost money as a result of this (if they sold) or their investment value was eroded by 8%.

Hopefully this is a lesson to "research firms" out there that Thor will drop the HAMMER on them if pushed too far!

Great read as usual Chris!

The SEC? Aren't they the ones that allowed Bernie Madoff to continue on with his Ponzi scheme unabated? As for the OSC, we all know they are a joke. Too bad, because Blackberry has a valid point and the regulators should not allow our capital markets (and BB's stock price) to be manipulated with false information.

Who is it with the Citi affiliation? I can't access the link.
Detwiler & Fenton (100 High St. in Boston, MA) is about two blocks from CitiGroup's Hedge fund office (100 Summer St.). Citibank is an 11% shareholder in Samsung, according to Samsung's website (http://bit.ly/aEmqiy)

What would a world be like if we only had Apple and Android (oh ooops I forgot about Microsoft) to choose as our communications device?

If you want a device to play with or think you're getting stuff done then fine get the heck off this website and quit spreading negative information that's not helping anybody..

Really good to hear from you. This comes like a relief after reading some negative news for BlackBerry.

Great job criss. I love blackberry.

BlackBerry rocks.

Posted via CB10

But... What if the firm is correct? I mean BlackBerry won't say publicly how many devices they have sold (not shipped) and they say their returns are on par with other premium phones. How would BlackBerry know how many of the returns are other devices? Are they comparing it to their own premium brand, that is the 9900? There may be some embellishing here from the firm, but that's par for the course, and of course BlackBerry has to do damage control, even if it's true. (Which it's probably not, IMHO)

1. They contact key carriers like Verizon and verify the stats.
2. Both Blackberry and Verizon confirm returns are in line with industry norms.
3. Fiduciary duty enforces a high ethical standard on company executives. They could not issue release and ask for SEC action unless they had the evidence to prove such action was warranted.

It's best just to Seek Anonymous, These "Guys" will find the stink pretty quickly.

If this is "Media/Internet" Corruption, its definitely their domain, and serves the interests of honest people.

This false info may even damage VZ and T sales of Z10 /Q10 , Blackberry needs to go full force marketing now show they mean business. VZ and T should also join the false reporting case.

If the analyst is a CFA member then another CFA ought to report this story to their regulatory body. Allegations have more teeth if it is coming from another member.

Posted via CB10

I really would love to see further actions by SEC on this. If no action from SEC, what will happen to BBRY stocks then in the short term? Guess have to wait for the next quarter's earnings report. Those will be facts. Official financials filed to SEC. Let those so called analysts eat on that when they see a big jump in sales. Q10 to save the day for BBRY!

Johnson claims to be a CFA (but an un-named 3rd party source, who I haven't any reason to doubt says he hasn't)

Thanks Chris Umiastowski, and God bless CrackBerry to post this article today. BlackBerry needs to set up a department to go after these negative articles. Hire good writers to find fact, research, and rewrite these false articles. These kind of writers get paid to write negative article or stories, so BlackBerry themselves should also be ready when these negative articles are written. Research for facts, origin, Ip address :) LoL ,chase them out of town, get them fired or sue them. It is crap. They can write all that negative articles, but you know what it wont stop those who are hook on BlackBerry. My sister law firm, half of the employee there just switched to Z10 and the rest are waiting for Q10; and so are many other companies. Again a big thanks to Chris Umiastowski!!!!!!

Yeah, Chris there seems to be a lot of smoke and mirrors going on in the market these days. I suspect that the hidden agenda of the behind - the -scenes manipulation is to set up the BlackBerry stock for a major takeover bid at dirt cheap prices.

Posted via CB10

I'm sure talking bull crap abt bbry in this way must harm there own reputation... I think apple or Samsung are trying to sabotage bbry reputation by paying lame companies like this to right bull crap and manipulate sales and return figures...

This is free advertising at least for bbry I guess... always in the news... good or bad... love my Z10..m better than gimmicky android and apple phones...

Bbry is a serious phone for serious users...

Posted via CB10

If this action is successful by BBRY, the hounds will be released and some major companies are going to be in big trouble.

Good stuff Chris.


Excellent post and bravo!! Tweeted for greater attention as this deserves it.

Ps: can you please send a note to the Crackberry de team for the CB10 app? Kindly ask them to build in a new URL shortener please? Thanks.

Posted via CB10

We need some stats from BBRY to back-up the company clams ASAP, or the stock will continue to tank on the news and spread to potential customers.

If it's true, how can returns exceed sales? You have to buy a phone to return it. What are people returning then? At most sales can equal returns.

Posted via CB10

At most the returns could be 5% of sales. I would find it very hard to believe the returns are higher than this because all you have to do is read the reviews posted at the carriers websites to get a consensus view of what the users think of the Z10.

What will be gone in order :: first the DETwiler faces, then the professional designation, then the website !!

BB should sue those assholes....they just cannot manipulate or manufacture some data to tarnish the reputation of Blackberry. If blackberry can get millions of $$$$$ from them for slander and defamatory data, Detwiler or whatever they call themselves will serve as scapegoat for other analysts or company that publish bitter information about other companies. Go BB

Once again a Big 'Thank You' Chris for your focused and insightful article.
It's a blessing to view your editorials and your clear, crisp presentation of facts and logical analysis.

I'm happier today because of the action BB has taken. However, would have preferred to see BBRY recover all of the lost value from yesterday. At least it's in the green today.

Detwiler & Fenton is located at 100 High St. in Boston, MA about two blocks fro where CitiGroup's Hedge fund office (100 Summer St.) is located. Citibank is an 11% shareholder in Samsung, according to Samsung's website (http://bit.ly/aEmqiy) Who wants to bet these guys golf together? Who lives in Boston and knows people who know people?

Mr. Johnston, who penned the report is also a former employee of Qwest Communications and Bell Canada ... don't know what that might amount to...

Would it be possible to file charges to them and have the lost in stocks paid by the people who made the negative reports?

"When a true genius appears in the world, you may know him by this sign, that the dunces are all in confederacy against him." --Jonathan Swift, Anglo-Irish writer

On the other hand there is also a saying "Never attribute to Malice, that which can adequately be explained by Stupidity" ---Various

Any legal beagles here who can start a class action lawsuit against DF to recover the approximately $500M shareholders lost yesterday? I'll join.

Posted via CB10

I hope the analyst firm AND THE 'REPORT' SPONSORS get what they deserve. This stuff has been going on for far too long, and it's time for the authorities who claim to want to keep our financial system "safe" to do their jobs.

Remember, this isn't just about BlackBerry / BBRY: remember how in 2008 the world almost ended? Well, if the stock markets are tacitly subject to this kind of manipulation, a gigantic crash is inevitable, unless the authorities properly disincentivize this behaviour.

If you truly believe someone is manipulating the market, do the opposite of what they want. Buy on bad news and sell on good. Beat them at their own game. Next quarter report will reward those that are right.

I find it interesting how great reviews and reception were and how much the rest of the world was falling in love with the Z10 before the US launch. Then after the US launch everything seemed to go down the toilet. The other three are all American companies, which really makes this look like protectionism from up here in Canada.

Posted via CB10

Chris, Great article, but I am not sure it was handled "beautifully". Great to see them respond, but responding yesterday with the denial and the referral to the SEC would have sent a much stronger message. Why they waited so late on both actions seems odd. Again, glad they finally acted but wish they would have been bolder.

I'd paraphrase it as "Go ahead and publish factual research, but if they're false the cops will shove a baton up your ass and empty your safe"

Posted via CB10

I didn't really understand all this manipulation stuff a few years ago, but after taking all the securities courses my law school had to offer, everything started to make sense, and I scrutinize all financial information released by these types of firms. I have been shocked at how they can freely make these types of claims and I was so confused as to why people don't raise concern with the SEC. Finally someone is stepping up! Good job blackberry with taking a stand. What also surprised me is that these kinds of acts can result in some serious jail time! Hopefully this will make this firm and others think before they make the unfounded claims.

Posted via CB10

I asked my buddy who sells phones at Costco how the z was doing and he said they have seen even lower returns than they do on other phones. I think that is saying something right there!

I find the reports are generally made to sound so negative when BBRY seems to have something so good going here.

I can't wait for my NFC to be able to make payments here so I can stop carrying around all cards. This phone has so much to offer!!!

Posted with my Zed via CeeBeeTen

I'm guessing because blackberry legal team is based out of Waterloo and that they are Canadian lawyers they may not have all the info readily available with regards to the US securities laws, after a quick search they probably realized they can pursue this further.

Posted via CB10

Taking legal action against Detwiler Fenton is definitely good news for Blackberry shareholders and Blackberry users. This step should help to protect their legitimate interests and protect Blackberry brand. But I'm afraid things are little more complicated.

Problematic and obviously negative research from Detwiler Fenton was (without any checking) in different forms frequently cited all over the internet.

Oh, wait! Isn't it well known BlackBerry bashing scenario used by News Corp. (Marketwatch, WSJ, All things digital, Barrons..), BGR, Cnet, Engadget, Techcrunch, Forbes, TheStreet, Cnbc, Insidermonkey and tons of other sites?

Rocco Pendola, John Paczkowski, Richard Saintvilus, Eric Savitz, Nigam Arora – just a few writers who work or worked for one of the media above. Type any of these names together with blackberry in searchbox and you will find how they (for very long time) reported on Blackberry.


Why certain media and their authors participated on BlackBerry bashing campaign? Did they receive any compensation for their "work"? What was the compensation? Who are the clients/advertisers of the media houses in question? Are their clients/advertisers directly or indirectly connected with Blackberry competitors and/or hedge funds shorting Blackberry?

I think answers to these questions would be VERY interesting not only for Blackberry shareholders.

"Attacking competitors, pointing to their weaknesses, and trumpeting one’s achievements is better done by hired media assassins. A company, directly or through a PR firm, engages oft-quoted consultants who provide the required third-party stats, barbs, and encomiums. This isn’t theorizing, I once was a director at a company, one of many, that used such an arrangement to good effect."

Jean-Louis Gassée, executive at Apple Computer (1981-1990), March 2013

This could end up backfiring if they are not able to establish anything...If Detwiler is absolved of any wrong doing, there would be a lot of egg on BBRY's face. The stock didn't recover on the news and if it doesn't pan out, will sell off more in my view.

Thanks for a good post, Chris. Good to see BlackBerry taking action to defend themselves finally! We Canadians are often nice but pushed too far we will bite back and bite back hard!

Great article Christ, as always.

The part i liked the most was :
" if you dare manufacture false information to manipulate the stock, we’re going to put the proper authorities on your ass.”

I loved it!!

Time to get people to make real researchs before publishing there work.

Posted via CB10

If the phone is selling so well and there are low returns, why not issue a stock buy back to stop the manipulation and get momentum back on the side of the longs. jeeeesh. Common BB, put your money where your mouth is. Probably better spent there than on some of the ridiculous marketing they’ve done.

I agree here (except for the stock buy back - I simply don't think they can...). Some notes to it:
- the QNX based OS should have been made top priority in adverts (pre-super bowl add comes close to a perfect execution)
- I have seen no adds concerning the Z10 in my country... 0 seriously!
- in general I feel that Blackberry has done a poor job promoting BB10 towards consumers (they did really well towards developers on the other hand, to bad it hasn't showed off in the really big name titles that would definitly bring a whole load of Fandroid & DiePhone users over/back to Blackberry..)
- very few Carrier employees even know about the Z10 (in my country, can't judge the places I haven't been)
A lot can be done in regards to promoting Blackberry and prevent such public bashing in the first place..

PS. I am a proud from-the-first day-owner of the Z10 and I have loved it for more than a year into the making and love it even more since I held it in my hand. I hardly let go of it and whoever sees me with it is stunned by it's performance, multi-tasking, HUB, html5 browser and definitly it's look and feel in the hand. I believe that we as BB10 owners should be doing face to face marketing where RIM/BBRY has come short (my opinion). TIP! Download the pre-super bowl add on your phone and show it to people who ask you about your phone. Then show them a couple of features like the ridiculous multi-tasking and the up-right movement for the HUB (do both at the same time!). Don't forget to show them the quick-menu-swipe in the bottom left while you're at it. They will be stunned! GUARANTEED!

Stock buybacks do absolutely nothing and cost company millions which blackberry can't afford right now. A reverse 2-1 stock split would be a better idea and cheaper for Blackberry. BBRY needs to trim the fat. Too many shares floating around means big shorts can accumulate ton of shares and get out of the stock pretty easily without feeling the pinch. Less number of shares the better for a squeeze if good news comes out.

I hope SEC and OSC comes down hard on the analysts, as I hope they would on any attempt to manipulate stock prices of any company with no verifiable or factual information.

Posted Via CB10 on my Zed10

I might fall in the return category... only because I want the Q10. If I can find a way to have both, then I will....

Posted via CB10

If Detwiler offers a retraction there should be a shareholder class action suit filed against them. That would catch the attention of those other scum "Analysts"

Posted via CB10

BBRY is the shxt! Thor don't play that! Crackberry Nation don't play that neither! Get Em Kev! If the haters would just quit hating and ride this BB10 wave the world would be a much better place! Lol pin:24F0E1AB

Posted via CB10

Well written article. Thank you. As a shareholder, I'm glad Blackberry is finally taking exception to the false information that has been running rampant lately. The way they're handling this just instills my confidence that they are on the right track. Nothing stops the true believers in Blackbery from taking advantage of this by increasing their stake in times like these.

I noticed that detwiler's twitter is now set to private, i hope these PARASITES get what they deserve.
Ive got a z10 and cant praise it enough.

Good on BlackBerry!!
And good on you, Chris, for this well-written story!
Death to lying-ass, BlackBerry-hating scum!!


Put your money where your mouth is Blackberry.

Sue them and let's see the official numbers. Enough of this shipped BS.

So people are buying and selling stock with other people's money. And these people that have been trusted with others money couldn't do the simplest math that would tell them you just can't return more phones than you sold no matter what the problem/problems may be with those devices. If you sell only one phone two phones can't be returned.

How did anyone take that report to be fact.

Posted via CB10

Chris, can you comment on what Henry Bloget said on CNBC this afternoon?


He seems to think what Detwiler Fenton said is valid and he even called their research "proprietary research" and that a CEO lashing out on this kind of issue makes analysts "matter" and 'it should be stated that it is wrong and it will be refuted in the next earnings report', not in ordering an investigation. He felt BlackBerry commenting on this was not the right move. What are your thoughts on that? I happen to think BBRY had no choice but to fight back in some way because there is a ton of misinformation out there and it is completely affecting the stock price and brand sentiment.

I think Chris's article, the comments, and the rest of the news coverage that happened today confirm that BB made the right move here. A line was crossed that resulted in a half billion dollars of market cap loss. BB has done a great job in controlling their reactions to the slew of bad press that has been flung at them especially in 2013. But they had to react to this one because of how blatant the Detwiler report was and how much impact it ended up having.

Well, both parties cannot be correct but neither really proves anything with verifiable facts. Denying something is true does no make it inherently false. Parceling out the fan boy part of the above article leaves little left to digest of any real factual/investment value and makes numerous unsupported allegations stated as facts. I am not sure who is telling the truth in this instance, and unless your in the BB boardroom, neither does anyone else. If this "analyst" deliberately made up false info to influence the stock price he should be fully prosecuted. Of course, the SEC is the proverbial fox guarding the hen house.
I have two vzn and two at&t stores in proximity and both say sales have been quite slow after a small initial burst at release. Anecdotal info to be sure.

Chris, thank you for the level headed and informative review of the situation. BBRY is definitely handling this the correct way; engaging in a public debate would only draw negativity. Best to let the professionals handle it!

Posted via CB10

O you who believe! If an evil-doer comes to you with important news, verify it, lest you should harm people in ignorance [out of haste in belief and making decision], and afterwards you become regretful for what you have done. - (Quran 49:6)

Well no one wants to hear this but their report back in December that the USA would not see the Q10 till June may well turn out to be true. Their other prediction that the USA would not see the Z10 did turn out to be accurate. I was outraged when they reported this back in December but they look like they may well be dead on. I looked it up again and they did say USA. I hate bad news on blackberry like anyone else but let's make sure we acknowledge the truth when it is true.

Posted via CB10

Sorry mistake
Their other prediction that the USA would not see the Z10 did turn out to be accurate.
should have been
Their other prediction that the USA would not see the Z10 till March did turn out to be accurate.

It is NOT a prediction if they had called BBRY's Investor Relations back then. IR will speak the truth.

Posted via CB10

Damage? Why don't you buy shares? They brought the price down for you ..... and did you a favour.
Take advantage of this golden opportunity. BUY BUY BUY.

Go after that particular analyst. Don't let him or her hide behind the facade of the firm's name. It's irresponsible. They earn revenue from their clients. If they are not morally just, they will say whatever they like to favour their own clients and help them make money.

Posted via CB10

Asking for SEC investigation is absolutely the right move. Bbry has been subjected to numerous bear raids predicated on questionable news/research. Large funds are protecting their ill advised 2 billion $ short positions. Without their continual interference the stock price would be much higher and less volatile. The artificially depressed stock price hurts investors and opens the company up to the risk of a hostile takeover well below the true value. Until now "Analysts" have slandered the company and product with impunity. Even if the SEC investigation leads nowhere it should at least dampen what has been rampant manipulation.

Posted via CB10

FINALLY .... THOR is taking action. GREAT WORK. Do not let these bullies manipulate the public and spread false lies about BlackBerry. Most Americans have weak minds and believe everything they read.
Sue their ass until they can't report anymore. Shut them down!
BlackBerry need to slowly buy back the shares to show the shorts that their time is coming. Squeeze them until they feel the pain.
Most media outlets don't verify stores. They re-publish. They must be sued !!!

Good Work THOR !!!

I'm glad to see BlackBerry taking affirmative action however, I'm afraid the damage may already be done.

I equate situations such as this to the likes of having an extremely diligent worker, who 9 out of 10 times does things right but the only thing the company remembers come promotion time is the 10th activity done wrong.

Posted via CB10 using a Z10

Detwiler lost all credibility when he stated that returns exceeded sales!?!?

Yup a bunch of lies and he got caught... let's hope the authorities take the appropriate action.

Posted via CB10

I don't have a problem with these guys coming out with factual piece, but I get scared when unsubstantiated stories get published without some due diligence to confirm the facts. I hope this forces journalists to do their best homework.

Thanks Chris for this informative article... I am glad that Blackberry handled this matter appropriately... Detwitler Fenton needs to be investigated for writing such trash...

I want to see The New BlackBerry standing up for itself like this MORE often !!!
Lets rock This !!!

I knew that the news was a bunch of BS that morning when I read it. I even post on Nasdaq stating the obvious that Detwiler only publishing that to intentionally manipulate the stock price. I can't believe people believe this ANALyst's report. I said I hope SEC gets involve and nail these A-hole into the grounds and it looks like they. Go bb.

Posted via CB10

When BlackBerry will update the bbm so We Can send broadcast message to all not taping one by one.please give US an update

Posted via CB10

Thanks Chris, for this report. I've been following the stocks for 4 years. It's a pity that people in the stock market have to do this thing to get money. In many cases wall street is dark. Goverment have to regulate it . I hope this guy pay for it. $BBRY have been works VERY HARD, for more than 1 year to grow the stock price and the benefits. Regulation and more regulation. I know that trader lives of speculation, another traders lives of investment but some time, guys like this cross the line.

Thanks again for this article.

Thank you BlackBerry for stepping up. Hopefully this puts a stop to the shenanigans so that I can continue to make some money out of these stocks. I have no doubt that BlackBerry will make a comeback similar to what Apple did with Steve Jobs.

Posted via CB10

At least two other companies should be added to the list along with Detwiler Fenton for investigation. Canaccord Genuity and Pacific Crest should also be investigated to see if they are guilty of false, misleading and incompetent reporting. A complete investigation would include those investment houses that financially benefited from the dissemination of this information.

Good job Chris.
If every person who held shares in BlackBerry DID NOT SELL THEM FOR 1 MONTH ... ( AND I MEAN EVERYBODY ) .... would these shares not rise till all the shorts covered ..... maybe to $500.00 ?
Lets try it!


To be perfectly honest i don't think the SEC will do anything, they will just drag their feet. It looks like Detwiler Fenton got away with it! However BB did the right thing (and full credit to Verizon for backing them up) taking action and making a public statement, it shows they are concerned about their investors. Hopefully SEC will do the right thing and do a full investigation because that's their job! But personally i don't think they will, they don't care about foreign company's.

Analyst give their opinions both positive and negative. Many times they are horrendously wrong. For example, many analysts had price targets as high as $90 for BBRY during the pre launch period of the Playbook. RBC's Abramsky comes to mind. In addition, the author of this piece, Chris Umiastowski as an analyst predicted that the iPhone would not be much of a threat to blackberry back in 2007.

It is up to investors to decide which analysts are worthy of belief and opinions. If the SEC investigated every mistaken analyst view, there would not be enough hours in the day.

@BBhomre - every analyst is entitled to their opinion, but they cannot indicate something is 'fact' without it being fact. That is 'willful manipulation' and I think Detwiler will eventually go bankrupt, the analyst will lose his credentials, and other analysts will be more factual. Still very hard to stop the 'bloggers' from releasing rumours with no evidence though....

Hopefully OSC finds the manipulation and lays charges. GO BB10 GO.
I am all for squeezing the shorts as much as possible. Teach them a hard lesson, one being broke after BB rises high.

Great article, Chris. Hopefully this matter will be sorted out soon and before the Q10 release.

Posted via CB10

Insider trading style motive? Influence the stock price and buy while it's lower. Then when stock rises again sell at a huge margin gain.....just sayin..

This will take weeks if not months to uncover nothing moves that fast with sec and worst is osc which typically wait for the sec.

Posted via CB10

I returned my first Z10 because the service from T-Mobile was horrible where I spend most of my time. I bought another Z10 from AT&T. Their service is much more expensive but at least it works.

I love my Z10

Posted via CB10

Per: tranamal
Why would anyone believe a boutique size investment/research firm have to report when they have a very ugly track records the past decade is beyond me.

"Since 2007, the Financial Industry Regulatory Authority, the industry body that oversees broker-dealers, has fined Detwiler over $250,000 and has cited it for several compliance violations over the past decade.

In December 2011, FINRA sanctioned Detwiler for failing to properly supervise its employees and for allowing its brokers to make more trades than necessary in clients’ accounts to boost commissions during a period between 2006 and 2009.

In 2007, the firm, which was then called Detwiler Mitchell Fenton & Graves, settled administrative proceedings that the SEC brought against it for failing to supervise Bradford Bleidt, a former employee who had been simultaneously running a $30 million Ponzi scheme."

IMHO, these "research" shops don't actually tell their clients what they say publicly/ The public statements are made to influence stock prices so the way the clients are really helped is that they take positions before public dissemination and also long term sustained bashing of a stock if clients are short and pumping if clients are long.
If not true, then why on earth any public disclosure is made of this proprietary research. Let boiler room outfits like Detwiler make research and sell it to clients and no public dissemination is made. If the research is good, then over the long term, clients will make money. Oh no, its all about making a buck now. as in this minute.

Great read. Happy to see someone jump on that story. All as it takes is a pathetic company like that to change the stock prices on a company that really could use all the positive spins they can muster. Really hope BlackBerry turns this around and comes back stronger than ever. Choices are good, choices are needed in this market.

I am traveling on Florida and spoke to the guys at Best Buy Mobile - they confirmed that "Most" are returning the Z10 on the 2nd day out of frustration. I can relate to that...the first evening I had mine, I offered to give it to a colleague as I just didn't get it...by the 3rd day they couldn't pry it away from me - the learning curve is clearly something that must be addressed. Now, it's the best phone I've ever had. Period.

Posted via CB10