Can BlackBerry Win the Battle of the Underdogs?

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By Dan Ritter | February 5, 2013 11:15 AM EST

Wall St. Cheat Sheet

Research in Motion BlackBerry ( to “Outperform” from “Market Perform” with a price target of $22 on the tail of the launch of BlackBerry 10.

BlackBerry’s dramatic plunge from smartphone industry leader to laggard is old news, and both the company and investors are trying to put the past behind them. Yes, BlackBerry’s was once a tremendous 20.8 percent, but the good old days are gone and BlackBerry’s position in the market needs to be evaluated with less weight given to its former glory, and more weight put on where it stands, and where it can go from there.

But that’s no small task. The company’s stock price has been highly sensitive to catalysts over the past few weeks. The underwhelming launch of BlackBerry 10 pulled the stock down 26 percent over a period of a few days. On its first day of trading as BlackBerry, the stock is back up about 15 percent. These tremendous swings represent buying opportunities for bulls with an appetite for risk (or shorting opportunities for bears), but they offer little insight into what the company is actually worth.

The analysts at Bernstein supply what seems to be a highly reasonable perspective on the company. of credible positive outcomes like a stabilized niche positioning, the development of new business models, strategic partnerships or even an acquisition.”

The smartphone market is bigger than two players, but between the two of them stands in the shadow of two tech giants, both of which have robust businesses outside of their smartphone segments. David versus Goliath is a great story, but there’s more than one David in the market.

According to data provided by IDC, the underdog that comes out on top is Microsoft’s (, just predictions, and anything can happen in a handful of years. But hope is not a strategy. There is no clear reason to expect that BlackBerry will spread like a virus in the smartphone market and find its way into the hands of every other consumer. Not only would it take catastrophe for Apple or Google to fall out of the top spots, but BlackBerry will have to outperform Microsoft as well.

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The article was first published by Wall St. Cheat Sheet and does not represent the views or opinions of International Business Times.

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