Jun 25, 2021
BlackBerry CEO focused on fundamentals, not Reddit frenzy
BlackBerry CEO on why he's not focused on company's wild stock swings
The head of BlackBerry Ltd. said he has no plans to cater to the group of meme-stock driven retail investors that have played a role in a recent run-up in the Canadian software company’s share price.
“This is not a world I should spend too much time in,” said BlackBerry Chief Executive Officer John Chen in a broadcast interview. “All I’m focusing on is the fundamentals.”
His comments come on the heels of some renewed investor outreach by companies caught up in the Reddit-fueled frenzy, notably AMC Entertainment Holdings Inc., which recently launched a portal offering new shareholders perks like free movies and popcorn.
BlackBerry shares are up more than 70 per cent year-to-date, and more than 120 per cent in the past year, but when asked if BlackBerry is looking into investor outreach or raising capital, Chen maintained the Waterloo, Ont.-based firm does not need any help raising money.
AMC and other Reddit-loved stocks like GameStop Corp. have both issued stock sales in recent months after taking the investing world by storm.
While retail investors may love the stock, Bay Street analysts aren’t as convinced as both Canaccord Genuity and CIBC downgraded BlackBerry on Friday, in the wake of first quarter results that showed a revenue drop from last year. BlackBerry's sales in its first fiscal quarter fell 15.5 per cent to US$174 million, while losing US$62 million in the three-month period ended May 31.
Chen chalks that hit up to difficult year-over-year comparisons for BlackBerry's cyberysecurity business, which saw strong licence sales at the onset of the pandemic as many companies beefed up their own digital security services to accommodate remote workers. Those conditions couldn’t be repeated this year, said Chen.
A once-dominant smartphone maker, BlackBerry no longer manufactures any handheld devices and focuses mainly on providing cybersecurity software and other services for internet-connected devices.
BlackBerry's QNX operating system, a platform that supports web-enabled devices, is now installed in 200 million vehicles, the company said. Roughly two-thirds of all electric vehicles sold are also powered by QNX, said Chen.
The 65-year-old Chen has been at the helm of Blackberry since 2013, but admits the pivot away from hardware has been a slow one.
“This is taking longer than I expected,” said Chen. “But I can see the progress. We’ll be patient.”