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BlackBerry Ltd.: Could This Rumour Move the Stock if Confirmed?

There is a new rumour going around that BlackBerry Ltd. (TSX:BB)(NYSE:BB) could possibly announce yet another strategically important partnership deal with a formidable Asian internet giant in the near future.

This speculation comes after BlackBerry announced a bullish news piece yesterday concerning its latest deal with long-term partner QUALCOMM, Inc. (NASDAQ:QCOM) in which the two tech giants will collaborate “to develop and produce cutting-edge automotive platforms for the next generation of connected vehicles.”

However, the latest Qualcomm deal did not move BlackBerry stock much; the share price only inched up by 1.2% to close at $13.21.

The latest rumour

An Australia-based digital intelligence market leader, Which-50.com has published a piece today revealing that “BlackBerry and Chinese internet giant Baidu Inc. (NASDAQ:BIDU) are in active negotiations to collaborate on the deployment of connected and autonomous vehicle technology for automotive OEMs and suppliers worldwide.”

The latest post follows after an article published on December 6 (now taken down) by the same media outlet titled “Blackberry and Baidu announce autonomous car partnership” revealed that BlackBerry had made a deal with Baidu. Which-50.com explains that the press release was recalled by BlackBerry just in time before being officially published as it was mistakenly released to the press.

The publisher claims that BlackBerry has acknowledged some contact with Baidu but didn’t confirm any deal. It says, “While no definitive agreement is in place between the two companies, Blackberry and Baidu are in active discussions. Terms of the agreement are yet to be defined and the parties confirmed to Which-50 negotiations are ongoing.”.

It is therefore very likely that if a definitive agreement does materialize between the two parties, we may receive yet another big announcement from BlackBerry any time soon.

Could the news move the needle?

BlackBerry’s recent deal announcements haven’t been that effective as far as significantly moving the stock price is concerned. One example is the latest Qualcomm deal announced yesterday, which appeared somehow bullish enough to move the stock some notches up.

Instead, BlackBerry stock only gained 1.23% on the TSX for the day.

However, a Baidu deal could add to more positive investor sentiment, especially if announced closer to BlackBerry’s Q3 2018 results due to be released December 20. Investors are becoming more anxious about the pending quarterly earnings results, after the last two previous earnings calls had positive surprises that lifted the stock price.

Baidu is making some significant investments in the autonomous driving space and has a promising “Project Apollo” software platform in the works that, if combined with BlackBerry’s trusted, reliable, and secure QNX automotive offerings, which are undergoing further development at the Autonomous Vehicle Innovation Centre in Ottawa, could be very accretive to BlackBerry’s share price growth.

BlackBerry is increasingly getting some significant endorsement from heavyweights in the autonomous driving industry, including Qualcomm, Ford, Delphi Automotive Plc, and Tata Elxsi, who are picking out BlackBerry for its trusted and reliably secure QNX and IoT (Internet of Things) systems for connected cars and autonomous driving vehicle offerings of the future.

That says a lot about the company’s future potential in the nascent but increasingly important self-driving autos segment, whose total addressable market could be potentially huge.

However, investors seem to have ignored much of the BlackBerry’s press releases in November and this month, as the stock has continued on a slow and steady decline.

This may be because the announced deals cover some potential revenue growth in the future, which cannot be confidently quantified right now due to severe uncertainty in the developing autonomous driving, cybersecurity, and IoT space.

A Baidu deal could generate some new interest in the stock though, but probably not as high as the next quarterly results due December 20, and definitely not as market moving as the bullish call in June by Andrew Left of  Citron Research calling BlackBerry a potential “next Nvidia.”

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Fool contributor Brian Paradza has no position in any stocks mentioned. David Gardner owns shares of Ford. Tom Gardner owns shares of Qualcomm. The Motley Fool owns shares of Blackberry, Ford, and Qualcomm. Baidu is a recommendation of Stock Advisor Canada.

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