BlackBerry (TSX: BB) investors saw shares plunge last week after earnings reported a US$56 million loss in the fourth quarter, with revenue at US$173 million. But it wasn’t the only reason that shares were done, with a lawsuit filed the same day as earnings reporting that chief executive officer (CEO) John Giamatteo sexually harassed an employee at BlackBerry.
Yet this week, BlackBerry stock has bounced back! Up about 9.7% since the fall, which is quite significant. So, let’s look at what’s going on with BlackBerry stock and if it’s enough to get interested once more.
What happened?
BlackBerry stock jumped more than 7% on opening on Tuesday as the tech company announced a team-up with Advanced Micro Devices (NASDAQ: AMD). The pair plans to roll out a new platform that will help create better robotics capabilities within the industrial and healthcare industries.
It’s a big step for BlackBerry stock, which sees most of its revenue come from cybersecurity offerings as well as licensing software. The company, however, has struggled to see more growth in the last few years. as was seen during its most recent earnings report.
The new software will combine BlackBerry stock’s software with AMD’s computer hardware. Together, the tech stock and chipmaker will create this new robotic systems technology for more integrated software-to-hardware foundations.
Getting in on big names
A huge benefit for BlackBerry stock is the partnership with AMD stock, a company that’s been a dominant name in the semiconductor market. This comes from the company’s evolution of an enterprise-focused company to being a pure PC chip provider.
So, this new venture certainly lines up with AMD’s new focus as well as BlackBerry stock’s hope to expand into areas that make sense. Ones out of the smartphone sector. It also comes as BlackBerry stock aims to separate its Internet of Things (IoT) business from its cybersecurity business.
These would go on to become standalone entities, offering more value for shareholders of the stock. What’s more, the company will likely become more flexible with each business separate to achieve their own growth strategies.
What to consider
Now, this all sounds like great news, and it is! But there is a key here. John Giamatteo came on the scene as CEO just in December 2023. Pretty much immediately, Giamatteo announced he would be separating the businesses, and not pursuing an initial public offering for the IoT business.
So, this separation is all his idea. Therefore, if the lawsuit against him continues and causes him to step down, it’s unclear where that will leave BlackBerry stock and the separation of these businesses.
All this to stay, there are still quite a lot of issues for BlackBerry stock. And the new CEO remains unproven in terms of delivering on these changes and solving the company’s growth issues.
So,, with a lawsuit on hand and a separation waiting in the wings, I would still wait on BlackBerry stock, though a new partnership with AMD stock looks quite promising.
