BlackBerry shares continue slide after launch underwhelms
Shares down 25 per cent since CEO Thorsten Heins took the stage Wednesday
A day after the glitzy party to launch the company's new line of smartphones, BlackBerry shareholders' hangover continued Thursday as the stock extended its four-day slide.
BlackBerry shares finished the trading day at $12.98 US on the Nasdaq, down six per cent on the day. That slide was a continuation of Wednesday's action, when shares in the smartphone maker started sliding after the company launched its next generation BlackBerry 10 line of devices.
BlackBerry shares had been slightly higher in early trading Wednesday before Heins took the stage at an event in New York a little after 10 a.m. ET.
Before the launch, BlackBerry shares were changing hands at $16.56 US. Within minutes of news emerging that the devices would not be immediately available in the U.S. market, BlackBerry shares started slumping. They closed Wednesday below $14 and continued that slide early Thursday, opening at $12.46 — almost 25 per cent below the level they were at before Heins started speaking.
"The release date of the devices was disappointing," Paradigm Capital analyst Gabriel Leung said. The new BlackBerrys will be available in Canada as of next Friday, but the much more important U.S. launch is delayed until some time in March. And the keyboard version of the new phones, known as the Q10, may not be in stores anywhere until some time in April.
"From what we understand, this is not related to pricing negotiations but rather a longer time for the American carriers to test new devices," Leung said. "We had hoped for a global Z10 release in early February and Q10 in March."
Leung maintained his "hold" rating but lowered his target price for the stock to $16 in a research note Wednesday.
Other analysts had a similarly underwhelming view following Wednesday's launch.
"We thought RIM management did a good job in launching BB10 and the Z10 and Q10 phones," Nomura's research team said in a note Thursday. "There were no big surprises, though."
All in all, BlackBerry's shares have gained more than 50 per cent since the start of January, so the recent slide could be in part related to investors selling the shares to try to lock in recent gains.
But while Nomura Securities gave the company credit for an overall positive launch, it said BlackBerry's main failure Wednesday may be that it did not reveal anything genuinely new.
"We weren’t expecting RIM to change its name to BlackBerry or for the singer Alicia Keys to be hired as the firm’s global creative director, but we suspect that neither will be material to earnings," the investment firm said.