It’s certainly possible that some Reddit traders have targeted BlackBerry (NYSE:BB) for a short squeeze in the past. That story is ongoing, as social media users could pump up BB stock again at some point this year.
If you take a position in BlackBerry shares during a downturn, you might benefit from a future short squeeze. Yet, that’s not the only reason to pay attention to this particular stock.
Long gone are the days when BlackBerry was just a maker of phones with little keyboards. Nowadays, BB stock traders should learn about the company’s forays into multiple technology sub-sectors.
After conducting some due diligence, you might find that adding some BlackBerry shares can diversify your portfolio — and social media traders are welcome to leave their memes at the door.
BB Stock at a Glance
Here’s the ironic part. As fierce as 2021’s short squeezes were, they’re nothing compared to the rally of the 2000’s.
From 2002 to 2008, BB stock ran up from $2 to more than $130. This just goes to show how far this stock could potentially rise — though I wouldn’t count on it reclaiming $130 anytime soon.
This year in January, the Reddit traders apparently asserted themselves as BlackBerry shares rallied from $7 to a 52-week high of $28.77. However, by May the share price retreated to $8.
That’s a prime example of how difficult it can be to profit from hype cycles. Your timing has to be excellent, lest you get caught on the wrong side of the trade.
Fast-forward to June 7, and BB stock was priced at around $11.50. That’s not necessarily a rock-bottom price, but there’s room to run and the next breakout could take place in the near future.
Unlocking Value
June 24, 2021, was a pivotal day as that’s when BlackBerry released its first-quarter fiscal-year 2022 results.
The market’s reaction was ho-hum. However, a clear-minded look at the data suggests that BlackBerry is doing just fine.
Wall Street analysts expected BlackBerry to report a 5-cent per-share loss, along with revenues of $171.3 million.
On an adjusted basis, the company reported a 5-cent per-share loss, so that was in line with the analysts’ projections. So, there’s nothing bad about that.
In addition, BlackBerry recorded $174 million in quarterly revenues, thereby beating Wall Street’s expectations.
It wasn’t a blockbuster revenue beat, but it should be enough to quell any skeptic’s concerns.
Also noteworthy is that BlackBerry is reportedly in talks to sell its intellectual property portfolio.
Evidently, Canaccord Genuity analyst Michael Walkley envisions this as a potential opportunity for BlackBerry to shore up its capital position.
“Should management reach a deal to sell the licensing business, we believe this could help unlock value and provide a capital infusion to drive accelerated software and services growth,” Walkley explained.
Turning a Corner
Plus, there’s another point that investors shouldn’t miss.
Walkley asserted that BlackBerry’s “management has created a cogent long-term strategy and the business is turning the corner toward stronger trends.”
What would these trends be? I can’t read Walkley’s mind, but there are growth-oriented market segments which BlackBerry is effectively addressing.
These are evident in the company’s quarterly fiscal data. For instance, during the first quarter of fiscal-year 2022, BlackBerry generated $43 million in revenues in the company’s IoT (Internet of things) segment. Not only that, but BlackBerry took in revenues totaling $107 million in the company’s cybersecurity segment.
Regarding the IoT segment, BlackBerry Executive Chairman and CEO John Chen is “pleased with the strong progress of the auto business, despite global chip shortage headwinds.”
And concerning the cybersecurity segment, Chen noted that BlackBerry “announced two new significant product launches as part of our XDR strategy — BlackBerry Gateway and Optics 3.0.”
The Takeaway
You can trade BB stock as a possible short-squeeze target if you’re so inclined. Just be aware that this strategy involves risks.
Alternatively, you can consider a position in BlackBerry as a wager on multiple tech-market trends.
That’s a strategy that makes sense, memes or no memes.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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