Word on the Street says that BlackBerry Ltd (NASDAQ:BBRY)‘s investors are in for a surprise by the Chinese manufacturer of computer technology, Lenovo, who is said to pursue an acquisition. This presents as a great opportunity to benefit from, and Recon Capital Partners Strategist, Kevin Kelly, revealed on Bloomberg his option play in this regard.
“[…] So BlackBerry Ltd (NASDAQ:BBRY) is actually in play right now by Lenovo so you can buy the call, the $12 call for about 50 cents and the deal is supposed to be priced out between $15 to $18, so at least it is great risk reward,” explained Kelly.
Bloomberg showed that this trade on BlackBerry Ltd (NASDAQ:BBRY) has a payoff ratio of 3.6 to 1. While the stock was down 1.46% and was trading at $10.15 at the closing bell, the afterhours trading saw it rise slightly by 0.3%.
With a current market cap of $5.44 billion, BlackBerry Ltd (NASDAQ:BBRY) has seen much better days when it wasn’t such a small market concern in the tech sector. The stock was even hovering around $200 during July 2007. However, those days seem a distant memory now, as Blackberry’s phones slowly but surely lost market share to Apple and Google’s Android based smart phones.
BlackBerry Ltd (NASDAQ:BBRY)’s current CEO, John Chen, has done a great job with whatever was left of the company for him. He cut costs and breathed some life into the company to even release a new smart phone, Passport. The sales have not been so strong, but the company hopes to make some profit from it going into the future. Moreover, Chen intelligently shifted his target customers for the new device as well. Instead of general users of smart phones, BlackBerry Ltd (NASDAQ:BBRY) focused on enterprise customers, selling the security feature of its device to them.
The deal with Lenovo might just be the ideal thing that could happen to Blackberry, considering the circumstances that it is in now. A call options play in this regard for less risk and an unlimited upside is certainly the way to go.
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