What Does Shark Tank’s Kevin O’Leary Think of BlackBerry Ltd.?

Would Kevin O’Leary buy shares of BlackBerry Ltd. (TSX:BB)(NASDAQ:BBRY), or say “I’m out”?

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Kevin O’Leary is well known for his role on ABC’s Shark Tank, in which he listens to pitches from entrepreneurs looking for investor money.

So, would he put any money into BlackBerry Ltd. (TSX:BB)(NASDAQ:BBRY)? On Monday Mr. O’Leary sat down with Catherine Murray of Business News Network and talked about the company.

Below we take a look at what he had to say.

Not a big enough fish

Mr. O’Leary opened by giving us one of his many theories: “If you can’t garner a 5% market share globally, you probably don’t have a long-term prognosis that’s good, and you’re going to eventually have to sell to somebody else.”

He makes a strong point. If a company has trouble achieving significant market share, it faces various disadvantages, no matter what the industry. Larger competitors inevitably operate at lower costs, enjoy stronger brands, and have better relationships with partners.

BlackBerry is of course no exception. It commands only 0.4% of the global smartphone market, and this number has not been increasing. As a result, wireless carriers simply aren’t pushing the company’s products. While talking about the major carriers in the U.S., Mr. O’Leary put it very bluntly: “That whole generation of sales people doesn’t know what BlackBerry is.”

Little traction

So, is BlackBerry ready to grow its market share? Mr. O’Leary doesn’t think so. As he put it, “I don’t think they’re getting the traction we all hoped for with products like the Classic, the Passport…I just don’t see them in the U.S. anywhere anymore.”

He’s not alone in his beliefs. Back in March, Morgan Stanley analyst James Faucette said that Classic and Passport sales were “not tracking anywhere close” to expectations.

Should we listen to him?

As we all know by now, BlackBerry’s focus has switched from handsets towards enterprise software. And in the long run, this is what will likely determine the success of the company. That being the case, software still only accounts for about 10% of BlackBerry’s revenue. And until that share grows significantly, revenue will continue to shrink.

Thus, Mr. O’Leary can be forgiven for his views, especially since he is not alone. As he put it so eloquently at the end of the interview, “I’m trying to say something nice, because I’m that kind of a guy, but it’s really getting hard.”

So, BlackBerry is clearly facing an uphill battle, something that investors should be well aware of before buying any stock. For this reason, I wouldn’t recommend holding more than just a few BlackBerry shares, and only if you’re very patient.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Benjamin Sinclair has no position in any stocks mentioned.

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