What happened to BlackBerry: Zombie stock or comeback king?

What happened to Blackberry? The company, once the most valuable in Canada, has effectively been a zombie stock for a while. Is the picture painted by the stock a fair one, particularly for a company whose revenues are up 20% YoY? Much has been written over the years about what happened to BlackBerry. The company, once briefly the most valuable company in Canada, has effectively been struggling for a long time, with its stock hovering flat around the $10 mark, effectively a zombie stock. The Q2 2019 earnings release has done little to help: the company missed estimates, sparking a new sell-off and another wave of articles. Is the picture painted by the stock a fair one, particularly for a company whose revenues are up 20% YoY? It belies all the changes that have taken place in the company in the last 10 years, including hiring a new CEO, its pivot towards reinventing itself as a software company, and its efforts to become "the world's largest and most trusted AI-cybersecurity company" and acquiring Cylance, an innovative and successful company in the booming cybersecurity space.

The recent history of the company makes for an interesting case study on how a hardware company can stay alive and become a more modern software company and on how a company that was presumed to be a dead man walking can turn (or perhaps, fail to turn) its fortunes. It is also, in some ways, a cautionary tale about the importance of perception.

BlackBerry Stock Price Evolution

8,000.00% 7,000.00% 6,000.00% 5,000.00% 4,000.00% 3,000.00% 2,000.00% Time to Turn Around 1,000.00% M 0% 1999 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 TM20.7% 22% 20% 18% 16% 14% 12% 10% 8% 6% 4% 0.0% 2% 0% 2009 2010 2011 2012 2013 2014 2015 2016 TM\fPeriod Cylance non-GAAP Revenue Rest of BlackBerry non-GAAP Revenue Total non-GAAP Revenue YOY Change Q1 2019 N/A $217 million (11%) Q2 2019 N/A $214 million (14%) Q3 2019 N/A $228 million (3%) Q4 2019 N/A $257 million 8% Q1 2020 $51 million $216 million 23% Q2 2020 $51 million $210 million 22% TM