What is wrong with BlackBerry? (Part 2)

I wrote a blog on Sunday, highlighting my curiosity with the trading of BlackBerry shares.  (here)  My curiosity can be distilled into the following question, “Why can’t BlackBerry have a positive transit of EBV-1 or $15.76 US?”  Well yesterday (Monday, May 6^th, 2013) provided an interesting example of what I’m talking about.

I have reproduced Monday’s trading action to illustrate my point.  Below is a snap shot of my Bloomberg for the daily trading action of BlackBerry (BBRY).

Intraday pice action of BlackBarry for Monday, May 6, 2013

 

You can witness yourself the struggle the stock is having with our Economic Book Value (EBV) line.  BBRY certainly trades above our EBV-1 line intraday however the stock price cannot close above our EBV line – illustrated above.  This has been on battle that has occurred on three separate occasions since mid January that I have pointed out in my previous blog. (here)

What to make of this price action?

There maybe good news on BlackBerry from the analyst community, but the stock is certainly struggling here at this EBV level.  BBRY was one of my original “Coming Out of the Blue” stocks (here) and still is unless the stock has a negative transit of EBV-3 anytime in the future.

To me, the market is saying BlackBerry will survive in its current form.  But in terms of valuation, the market isn’t even giving the company a valuation commensurate with the company’s accounting book value and this is surprising.  This shows that BlackBerry needs to do a whole lot more in the marketplace to compete with Apple and Android before any additional valuation to given to this company.