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BlackBerry rally derailed as investors lose patience on turnaround

By REUTERS
August 20, 2017

TORONTO: BlackBerry Ltd shares have been plunging from their more than two-year high hit in June after lackluster earnings and competitive threats have raised doubts about prospects for a turnaround at the business software maker.

At Friday's price of about $8.70, BlackBerry's U.S.-traded shares have lost a quarter of their value since reaching a high of $11.74 on June 1. The stock had rallied from a low of $6.65 in early March on hopes for the company's QNX industrial operating system for self-driving cars, but investors have started to reassess the yearslong effort by BlackBerry to move beyond the smartphones that made its name a household word.

"It's been a turnaround story now for about five years," said Joel Kulina, a technology-sector market maker for Wedbush Securities. "People don’t have the patience."

Chief Executive Officer John Chen has spent years remaking BlackBerry as a software company focused on selling to automakers and other industrial businesses.

Revenue, which peaked at about $20 billion when BlackBerry was dominating the smartphone market, has fallen sharply. Analysts expect it to drop below $1 billion this year for the first time since 2004 and decline again in the following fiscal year.

"We're not going to jump in before we see some signs of turning the corner and establishing meaningful profitability," said wealth manager Chris Zaccarelli, whose Cornerstone Financial Partners in Huntersville, North Carolina, advises on $1.2 billion of assets.