BlackBerry (BB.TO)

Very speculative so wouldn’t put your whole portfolio into it. These are very early days and he thinks John Chen is doing a fantastic job. Forget about the handset. What you are doing now is buying a software company. In another year or 2, we will have 5 billion smart phones out there. Secure communications going forward will become critically important. This is a software company that you are buying right around Book Value.

Their long-term vision is very elusive because of the change in management. This is a rebirth, the ability for new management to position the company and to talk about what it is going to do. From what he can see, they are going to be very much more a niche product versus a consumer product, which would be a very good thing. The question is, how do they define that niche and what inroads will the competition make as they are trying to define themselves. Right now you have a very large Short position and a lot of scared Shorts so he would think there is some upside in the short term. If you see a 20% gain from here, Sell and move on.

Biggest mistake last year was buying into this company. Thinks that John Chen is a good turn around person. He turned around Sybase. Feels this company has tremendous potential. Has better than $1 billion in revenue every quarter and still has a pretty good balance sheet. You have to watch that Prem Watsa doesn’t hold too much sway.

Everyone is going to have a smart phone in the next 5 to 10 years and BB will participate in this market. They will not be number 1 but they could be number 5-8 and still make good money. It’s cheap and undervalued but it could be years to get to $20-$25. You might be able to trade it up to $10 in the short term. Will be volatile over the next two years.

This is going to have tough sledding. Fundamental change factors on this are very negative and remain very negative. The new CEO will likely clean house. You are really making a bet over a 3 to 5 year period that Mr. Chen is going to figure out new product areas while defending the core enterprise.

It is in the hands of complete speculation right now. You won’t have earnings for years. Would never invest in it.

Enormous risk in this story and there always has been. Very speculative stock. Very hard to know. There is some value there. Just reported $4.4 billion of losses this quarter. Parts are probably worth more than the whole at this point.

(Market Call Minute.) This one will come back, but it is too early.

(A Top Pick Nov 26/12. Down 43.45%.) Had never owned this in the fund, but does own some personally. This one looked good a year ago. If it were trading above $10.34, which was his last line, it would be “coming out of the blue” again, a positive position in his funds.

Bought before takeover was announced. The deal did not make sense to him.

A great company. Struggled to transition to a software and service world. They are going to use up their cash. It is not obvious who should buy them. There is some value buyer. Their messaging platform is wonderful. Thinks he will be pressured to move to other vendors because of the concerns.

If the Chinese Lenovo are the last chance, then the Canadian Gov’t may allow the sale. One of Blackberry’s biggest customers is the US government, so it is unlikely to be sold to China.

Does not rank well in his process, about third or forth from the bottom. They need to do a lot before they could come back into his process. If a deal gets done it could be at a lower price. Thinks somebody will buy it as a whole for the technology.

With Mike Lazaridis there and Prem Watsa looking at it, every major institutional client in Canada is going to get a call on this as a potential capital investor. There is some value here but it is a bit of a melting ice cube.

At this point, Blackberry the consumer products company, is basically dead. The question is, what are the patents worth and he has no idea.