Blackberry’s Stock Takes a Body Blow

Blackberry shareholders should strap themselves in for a wild week!

Iain Butler

Chief Investment Advisor, Motley Fool Canada Fool since November 2012 Iain Butler, CFA, is Lead Advisor on Discovery Canada 2017. He is also the Chief Investment Advisor for Motley Fool Canada and is the lead advisor on its flagship Stock Advisor Canada product. Before joining the Fool, Iain was a “buy-side” analyst and through this experience is well-versed in the idiosyncratic ways of the Canadian market. His investing interests are centred on scouring the market for interesting businesses that trade at reasonable prices and offer an appealing risk/reward relationship. Since joining the Fool in 2012, Iain dedicates each day to spreading Foolishness throughout this great country!

Published March 25, 2013 10:19 am EDT

Blackberry (TSX:BB,NASDAQ:BBRY) will be providing the first glimpse at actual sales figures for the new BB10 device this Thursday (March 28^th) when the company announces quarterly financial results.

However, one market that won’t figure into this week’s release is the U.S., which just so happens to be BB’s most important market. The new Blackberry was just released in the U.S. last week and this morning Goldman Sachs downgraded the stock to “neutral” based on a seemingly tepid reception at 20 retail locations, including AT&T and Best Buy outlets that the firm checked.

This news sent the stock reeling, down by more than 7%, in early Monday trading. Goldman’s target moved from $19 (US) to $17 (US) and they are now assigning a 20% probability of success for the BB10 product, down from 30%. Oooof!

The Foolish Bottom Line

If you’re in the mood for a bit of gambling, few names offer a better outlet than Blackberry, especially this week. Not only is the company reporting eagerly expected results, the new BB10 is launching at Verizon as well. To be clear, gambling is not a Foolish investment strategy.

Because of the outstanding short position against BB shares, the stock can be expected to rip higher if results are decent. Today’s Goldman downgrade has only added fuel to this fire. Expect more sell-side preliminary reports in the first half of the week, like Goldman’s, as analysts position themselves for Thursday’s moment of truth. Blackberry shareholders are in for a wild one!

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Fool contributor Iain Butler does not own shares in any of the companies mentioned in this report at this time. The Motley Fool has no positions in the stocks mentioned above.