Boston, MA 12/30/2013 (wallstreetpr) – Blackberry Ltd (NASDAQ:BBRY) spent its last few years making losses. Attempts to shore up the company with new product releases have failed to attain any meaningful gain. In any case, the company has recently written-off more than $4.4 billion in inventory.
However, even as it may look gloomy for the pioneer smartphone-maker, the company’s interim CEO Mr. John Chen, who took over the reigns in November believes that turnaround of the company is possible. However, it needs to be understood that such turnaround will not happen overnight. In his view, Blackberry Ltd (NASDAQ:BBRY) will not see profits at least until 2016.
Investor fatigue
Investors have been very patient with Blackberry Ltd (NASDAQ:BBRY), and of late they have been buying into the promised growth since the management of the company was changed following a failed sale deal. But it remains to be seen just how long this patience can be stretched before investor fatigue sets it. The promised profits in 2016 onwards cannot benefit moment investors, but stock-price surge can be a reason for someone to remain bullish in the stock.
New development
This month Blackberry Ltd (NASDAQ:BBRY) announced that it has outsourced its device manufacturing business to Foxconn Technology. This deal is strategic for the company’s growth, since takes away the burden of perpetual inventory write-offs. Also, it saves the company upfront investment for device manufacturing. This essentially means that you will not see Blackberry Ltd (NASDAQ:BBRY) reporting huge holes in its finances in the ensuing quarters. Instead, it will have time to focus on its other businesses for revenue boost.
The manufacturing deal with Foxconn, at present only covers the low-cost phones, but it is expected to capture the high-end devices in the coming years.
This month, Blackberry Ltd (NASDAQ:BBRY)’s co-founders abandoned their quest to take the company private and went ahead to reduce their stake in the company. This signals a change of heart and possible indication that the company is headed in the right direction under Mr. Chen’s leadership. Further, the co-founders have slashed their stake in the company reduces the level of interference that they can have, in the ongoing turnaround efforts.
