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BlackBerry running out of lives

June 17, 2014: 12:52 PM ET
Clear! BlackBerry CEO John Chen is trying to shock some life back into the company. Is Project Ion the cure?

Clear! BlackBerry CEO John Chen is trying to shock some life back into the company. Is Project Ion the cure for what ails it?

The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, Abbott Laboratories and AbbVie, La Monica does not own positions in any individual stocks.

Does BlackBerry have more lives than a cat?

Every time the company's stock hurtles from a stunningly great height, it somehow seems -- in cat-like fashion -- to land on its feet.

(Rumor has it that the Interwebz is all about cats. So by including the word cat multiple times at the top of my column, I hope that will boost the chances of it getting shared socially and optimized for search engines and all that cat jazz. Cat. C-A-T. In fact, a certain news site whose name rhymes with Fuzzweed had a story last year about a cute feline named Blackberry.)

Anyway, you might be surprised to learn that shares of BlackBerry (BBRY) are up about 8% this year. It has outperformed the Nasdaq and CNNMoney's Tech 30 index.

And while BlackBerry's stock hasn't done as well as competitors Apple (AAPL) and Microsoft (MSFT), it has having a better 2014 than the two kings of the Android camp: Google (GOOGL) shares are down this year while Samsung's stock is flat.

Why is BlackBerry doing this well on Wall Street considering that the company continues to lose money and subscribers and is expected to post another huge drop in sales when it reports its fiscal first quarter results on Thursday? Hope. Springing eternal. Again.

CEO John Chen has a new plan to try and shock some life back into BlackBerry. Interestingly, it has little to do with BlackBerry's trademark smartphones. In mid-May, BlackBerry unveiled what it is calling Project Ion, an initiative to connect all types of devices to the Internet.

The clunky tech jargon for this trend is The Internet of Things. Some use the term "connected home" instead. But it's definitely a hot market right now. It's also getting crowded.

Apple is trying to increase its presence in it with its new HomeKit app while Google made a big splash earlier this year by purchasing startup Nest, a maker of "smart" thermostats and smoke detectors, for $3.2 billion.

So how does BlackBerry fit in? The company already has a big presence in the connected car market thanks to its QNX operating system, software that BlackBerry purchased from speaker maker Harman International (HAR) back in 2010.

Related: BlackBerry stock rises on Ford tie-up reports

Update 6/18: On Wednesday morning, after this column was first published, BlackBerry announced a deal with Amazon (AMZN) that will give BlackBerry users access to Android apps in Amazon's appstore later this fall. This will take effect following an update to BlackBerry's operating system: BlackBerry 10.3. It's a smart move.

It makes sense for Chen to emphasize BlackBerry's software over its hardware. If the company is going to survive (more about that in a bit) then it probably is going to be on the back of QNX. Heck, BlackBerry could eventually/finally become an attractive takeover target if Project Ion is successful.

But we've been here before. BlackBerry is a company that has had a history of false starts.

  • Remember when the BlackBerry Bold, first released in 2008, was supposed to derail Apple's iPhone momentum? It didn't.
  • Remember when 2010's Torch phone, which combined a touch screen with a sliding QWERTY keyboard, was supposed to save BlackBerry? It didn't.
  • Remember when 2011's PlayBook tablet was going to be BlackBerry's answer to the iPad? It wasn't.
  • Remember when the launch of the long-delayed Z10 phones were finally released in early 2013? They ran on the company's BlackBerry 10 operating system, which is also based on QNX. That didn't stop BlackBerry's slide either.

Still, I get why investors are optimistic. Chen is not responsible for any of the company's previous blunders. He is an outsider who has a track record of taking a sad software song -- Sybase -- and making it better -- by selling it to SAP (SAP). The hope is that lightning can in fact strike twice.

And even though the stock has been insanely volatile during Chen's short tenure, the trend is up. Shares have surged nearly 25% since he took over in November of last year. What's more, the stock is up more than 10% since the reveal of Project Ion.

Related: BlackBerry is Black-Bear-y again

Can Chen turn BlackBerry into another Sybase? Perhaps. But he won't have a lot of time to do so. And that's why, despite a smart strategic move to de-emphasize the hardware business, particularly the consumer smartphone market, the odds are against him.

The numbers just don't look good. Analysts expect BlackBerry to report a loss of $167.5 million in the first quarter and $535.4 million for the full fiscal year. Wall Street is forecasting losses for the next two fiscal years as well.

While BlackBerry still has a decent cash cushion, it won't last forever. The company finished its last fiscal year with $2.7 billion in cash, down from $3.2 billion at the end of the third quarter.

So the most important number to keep an eye on when BlackBerry reports its results Thursday will be its cash balance. If BlackBerry burned through another $500 million in cash, then Chen may need more than the Internet of Things to save the company. He'll need a miracle. Paging Mike + The Mechanics!

Cats get only nine lives. I think that the company may now be on its sixth or seventh.

Also, what's that term investors use to describe a stock that has a short rebound in the midst of a larger fall? Oh yeah. A dead cat bounce!

  • BlackBerry is Black-Bear-y again

    The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, Abbott Laboratories and AbbVie, La Monica does not own positions in any individual stocks.

    Just a few months ago, investors were head over heels (resisting the urge to throw in a YouTube clip of The Go-Go's ... or Tears for Fears ... #ilovethe80s!) for new BlackBerry CEO John Chen.

    Shares MORE

    - May 8, 2014 1:19 PM ET
  • Time to jump off the BlackBerry bandwagon?

    The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, Abbott Laboratories and AbbVie, La Monica does not own positions in any individual stocks.

    CrackBerry addicts rejoice! It seems that BlackBerry is here to stay.

    At least that what Wall Street -- and Bay Street for my neighbo(u)rs to the North -- think about the company.

    Shares of Ontario-based MORE

    - Mar 4, 2014 1:31 PM ET
    Posted in: ,
  • BlackBerry: Not dead yet! Seriously

    The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, Abbott Laboratories and AbbVie, La Monica does not own positions in any individual stocks.

    BlackBerry, the smartphone maker formerly known as (Prince?) Research in Motion, is having a terrible 2013.

    Okay. I'm sugarcoating the situation by merely referring to this year as terrible. It's been horrific. Deplorable. Ghastly. MORE

    - Dec 10, 2013 4:04 PM ET
  • BlackBerry faces trash talk ahead of earnings

    The bulls and bears were going at it over BlackBerry on Thursday.

    The smartphone maker reports quarterly results ahead of the market open Friday, and traders on StockTwits were jousting over how to trade the stock.

    BlackBerry (BBRY) shares were down about 2% in afternoon trading, despite a rally in the broader market.

    ms101
    $BBRY tanking again. they will miss

    Oh snap! They will miss? The bulls aren't going to let that MORE

    - Jun 27, 2013 2:15 PM ET
  • Apple down, BlackBerry up: The new normal?

    The second quarter is looking a lot like the first quarter for two smartphone makers who share their corporate monikers with the name of a fruit.

    Apple (AAPL) fell nearly 2% Monday. The iEverything maker's shares were down 16% in the first three months of the year, making them one of the worst performers in the S&P 500.

    Meanwhile, BlackBerry (BBRY) was up more than 5% Monday. The stock gained more than MORE

    - Apr 1, 2013 12:38 PM ET
  • BlackBerry back from dead (for now) with Z10

    The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, Abbott Laboratories and AbbVie, La Monica does not own positions in any individual stocks.

    We're number 3! We're number 3! And we might slip to number 4? For BlackBerry (BBRY) investors, it doesn't seem to matter.

    BlackBerry, the technology company formerly known as Research in Motion, has a lot going MORE

    - Mar 14, 2013 1:18 PM ET
  • Investors love their BlackBerry (stock)

    There's a lot riding on BlackBerry's new smartphone, which is about to hit the U.S.

    So far, investors seem to be in the smartphone makers corner.

    Shares of BlackBerry (BBRY) rallied nearly 11% Monday.

    "I'm not dead yet!" could be BlackBerry's mantra, to quote Monty Python. After multiple misses and few hits, the Canadian smartphone maker seems to be on the right path.

    The Z10, which features an all-touch keyboard, will make its U.S. MORE

    - Mar 11, 2013 12:13 PM ET
  • Research in Motion surges 10% while Apple tanks

    Oh, how the tables have turned in the smartphone world ... at least when it comes to stocks.

    Apple shares continued to take a tumble, while shares of Research in Motion rallied again. Traders on StockTwits could barely contain themselves.

    joemccann
    $AAPL breaks below $500. Meanwhile, $RIMM up nearly 25% in less than 2 trading days.

    Yes, RIM (RIMM) shares jumped more than 10% Monday. And the mighty Apple (AAPL), the most valuable tech company in MORE

    - Jan 14, 2013 12:38 PM ET
  • RIM gets its groove back with BlackBerry 10

    Research in Motion is hoping to get its groove back with the upcoming launch of BlackBerry 10, but whether it will work is anybody's guess.

    For now, investors are willing to give the company somewhat of a chance. Shares of RIM (RIMM) rose 5% Thursday following news that the U.S. Immigration and Customs Enforcement agency will begin a pilot program early next year to test the company's new smartphones and MORE

    - Dec 13, 2012 1:00 PM ET
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