BlackBerry shares move higher on optimism over US Department of Defense
TORONTO — BlackBerry (TSX:BB) shares rose more than nine per cent on Monday, after the smartphone company received a vote of confidence from the U.S. Department of Defense.
The government agency says about 80,000 BlackBerrys will be deployed on its new mobile device management system by the end of this month.
The disclosure last week also shows the U.S. government still considers the Waterloo, Ont.-based company part of its stringent security infrastructure.
Shares of BlackBerry were ahead 90 cents to $10.88 in the afternoon, after rising to as high as $11.70 earlier in the session. U.S. markets were closed in observance of Martin Luther King Day.
Both Google and Apple have dedicated more time to growing their position with government agencies and corporations with their own enterprise software.
A note from analysis firm Citron Research has urged Wall Street investors to reconsider their view of BlackBerry as a struggling smartphone maker.
“It is (our) opinion that it is suicidal to bet against well-capitalized strong management in the enterprise mobile space,” said the research firm in a note.
“The reality is (BlackBerry) has a healthy balance sheet, with ample liquidity to execute its turnaround strategy and make the necessary investments for growth,” Citron Research added.
The report focused primarily on the hiring of John Chen as Blackberry’s new chief executive, and it firm’s belief that there’s a misperception about the company’s business strategy.
Citron said analysts are too focused on BlackBerry as a hardware provider and not enough on its intention to develop software for the business community.