Can BlackBerry Recover from Its Terrible Week?

blackberry

The news went from bad to worse this week for BlackBerry (NASDAQ:BBRY). With the release of the disappointing Research in Motion earnings report, the markets expressed zero confidence in the Canadian smartphone company whose shares dropped 31 percent for the week by the close of Friday trading in New York. Analysts expect the annual shareholders meeting next week to be filled with tension as the company’s future hangs in the balance.

The main question on shareholders’ minds will be whether BlackBerry can recover from its continued losses and regain market share from dominant Apple (NASDAQ:AAPL) and Samsung. Sales of the iPhone and Galaxy S4 have outpaced the BlackBerry 10 line by such a wide margin that few believe the Canadian company has options left. Other Android (NASDAQ:GOOG) devices and Windows Phones (NASDAQ:MSFT) are also beating out BlackBerry 10 devices. Some analysts believe the end is in sight.

“The results were a quasi death knell for BlackBerry,” Montrusco Bolton’s John Goldsmith told Reuters. He expects the Research in Motion meeting on Tuesday to feature a number of vocal shareholders after the “violent” movement on the markets this past week. Thorstein Hein, BlackBerry’s chief executive, considers it a passing trend.

“We have managed our cash carefully and prudently, and we now have the funds to invest, so this is the ‘create the future’ year,” Heins told Reuters this week. “We stay the course. This is the course that management has created and it is course that the board has accepted.”

Many shareholders would tend to disagree, with the stock plunging so dramatically following the earnings report. Many of its top institutional shareholders are encouraging a sale of part of all of the business, which also includes lucrative patent holdings.

“It is the board’s job to deal with this objectively, and we hope they would be objective enough to do the best thing for the shareholders,” said Don Yacktman, who is president of Yacktman Asset Management. The company holds 5.8 million shares of the company and is among its top 20 stockholders.

More devices in the BlackBerry 10 line are on the way for 2013. It’s unlikely any of them will change the company’s course for the long term.

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