Over the last couple of years and countless doom and gloom stories from supposed reputable media and financial experts, BlackBerry stock has taken a beating. The sharks came out in droves looking to capitalize on the feeding frenzy by shorting the stock in record numbers.
Well…oh they times they are changing. The shorts are scrambling and according to this article from Seeking Alpha, the shorts are doomed. The article sites 4 majors reason why this is the case:
CEO John Chen Can Fight Gravity
$2.7 Billion Cash Hoard
Positive Cash Flows
Wall Street in its Cheering Section
BlackBerry has right-sized its cost structure amid revenue declines, delivering a positive earnings announcement in its most recent quarterly report. With a focused business strategy that plays to the company’s strengths, positive cash flows and support from Wall Street analysts, shorts are doomed.
The Seeking Alpha article suggests that this doom is coming with currently 93 million shares of BlackBerry being sold short (approximately 18% of outstanding shares). This is the one part of the article I somewhat disagree with, because the doom has already arrived and the shorts….well lets just say they were caught with their “shorts” down.
According to this Financial Post article from March 27, 2013, BlackBerry shorts hit an all time high of over 155 million shares or just over 30% of outstanding shares. This was on the heels of BB10 launch and the continued media negativity. Now here we are just over 1 year later and shorts are starting to scramble to cover their positions as John Chen continues to amaze.
BlackBerry is back and many are left with their shorts at their ankles and are about to lose their shirts.