BlackBerry’s stock price was up again yesterday, and it’s logical to assume this move was driven by the Pentagon’s announcement that it will deploy 80,000 new BlackBerry devices starting Jan 31st of this year. UPDATE: It looks like I was mistaken to use the word "new". While some deployments will certainly be new devices (people break/lose them, new ones are purchased), this doesn't appear to be a new device order. When I'm wrong I admit it :)
Between the very bullish Citron report and yesterday’s Department of Defense story, BlackBerry continues to trade higher. I think short term stock analysis is a total waste of time, but that doesn’t mean day to day news doesn’t matter. It helps us understand a company’s health, and when you have a major division of the US government standing behind BlackBerry, it’s bound to help investors feel more confident about the company’s future.
As a short side note, I saw a trader on Twitter comment about how BlackBerry shares were not moving up because of the Citron report, but instead because sentiment on the stock has improved, and “most good traders know this”. To me that’s like saying fewer people are depressed these days because most people are happier. It’s a tautology. It presents no actual information. Obviously stocks move in the short term in response to sentiment because the stock price at any given movement represents quantification of the average (positive or negative) sentiment.
Guys and gals … learn to totally ignore short term market fluctuations. It won’t add any value to your life. Pay yourself first (i.e. save) and invest for the long term.
Ok. So that’s my little stock rant for today. Back to the story … the deployment of any new devices by the Pentagon devices itself is no big deal. It’s a tiny little improvement in device sales and call me Captain Obvious for pointing out that we would be hard pressed to measure the effect on the company’s income statement.
The true importance of this news comes from what it says about confidence in the company’s future. Not only is the Pentagon remaining a big BlackBerry device customer, but they’re running BlackBerry enterprise device management tools too (they were one of the first to approve BES 10). So they’re effectively telling the rest of the world, “Hey don’t worry about BlackBerry’s continued existence. We’re not worried. We know they’ll be around.” That’s an important message for IT folks in other organizations to hear.
The company made some of its own huge communication mistakes, but I really think the hundreds or even thousands of negative media headlines caused people to believe that BlackBerry was soon to be gone
Since I brought up stock sentiment above, I’d also like to talk about business sentiment because I think it’s really important. Remember over the last two years the media (in general) was pounding all over BlackBerry for a variety of device and OS-related reasons? First there was extreme skepticism that Waterloo would ever even launch BlackBerry 10. Then there was a variety of criticism about the hardware and operating system features. But the real damage came (in my opinion ... I admit I’m guessing) when the device sales numbers came in below expectations. This is what drove tons of headlines about BlackBerry possibly exiting the hardware business or even going bankrupt. The company made some of its own huge communication mistakes, but I really think the hundreds or even thousands of negative media headlines caused people to believe that BlackBerry was soon to be gone. I think that caused a snowball effect of negativity. It hurt.
Today I think we’re starting to see the reverse situation manifest in the marketplace - and thanks to John Chen’s very different communication strategy. People (i.e. technology buyers in the enterprise market) are starting to be bombarded with positive messages about BlackBerry’s dominance in enterprise. Independent reports(such as by Citron) that take a strong stand are getting airtime in the media. This helps the message go viral, and I think has an important effect on the perception of BlackBerry by customers.
Customer sentiment matters, and I think yesterday’s Pentagon news is another great example of positive sentiment that is helping the business.
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