Traders in BlackBerry Need ‘Neck Brace’ as Stock Moves 5% on Any Given Day
And the winner for craziest stock of the year is ... Blackberry. The formerly-named Research-In-Motion trades, on average, 5 percent in either direction on any given day this year as traders, investors and Wall Street analysts guess whether their new phone will be a success or not.
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"I would be surprised if traders are able to make enough money trading BlackBerry to offset the cost of a neck brace," said Stephen Weiss of Short Hills Capital. "I have been out of it for a few weeks since sentiment has changed from universally negative to a battleground where the last data point controls until the next data point."
The shares jumped Monday after CEO Thorsten Heins told a German newspaper that sales of its new BlackBerry 10 phone are better than expected and that the company is increasing production.
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This follows a 5 percent plunge on Friday after an MKM Partners analyst downgraded the stock, saying there is a low probability of success for its new line of phones. That was the eighth upgrade or downgrade of the stock this year.
"BlackBerry is essentially a binary event now," said Scott Nations of NationsShares. "The BB10 products will catch on or the company will fail. There's very little middle ground, which leads to this volatility."
At the end of January, the battered company unveiled the new line of Blackberry 10 smartphones for global markets, as well as changed its company name to its key product. The make or break moment for the stock may be when the U.S. version of the phones go on sale in March.
The stock dropped 12 percent the day of that unveiling in New York for its 5th double-digit move of the year, as investors were disappointed in the U.S. launch delay. Despite all the volatility, the stock is up 14 percent for the year.
"As a trader, I love it," said TradeMonster's Pete Najarian, who uses options to limit his risk in trading in and out of the stock. "But it's a nightmare for the regular investor. There's a new story per day likely to move it."