TORONTO, July 2, 2026, 12:09 EDT
- BlackBerry Limited (NYSE:BB; TSE:BB) dropped roughly 8.8% to $11.68 during midday trading in the U.S., slipping after an earlier high of $13.00.
- The stock gain triggered a window from July 1 to Sept. 30 for holders to convert the 3.00% notes, with full conversion allowing up to 51.5 million shares to be issued.
- QNX revenue jumped 26% in the quarter. But the stock is also moving on dilution and cash concerns.
- NYSE will trade on Thursday, but is shut Friday for the Independence Day holiday. Toronto is back after the Canada Day holiday.
BlackBerry Limited (NYSE:BB; TSE:BB) shares dropped sharply Thursday, but the daily move wasn’t the whole story. The recent rally has brought the company’s convertible notes into focus as investors rethink the valuation for its QNX embedded systems business.
BlackBerry’s U.S. shares were at $11.68 as of 11:54 a.m. EDT, off $1.13 from the previous close. The stock opened at $12.75 and touched $13.00 earlier in the session. Trading volume reached 28.4 million shares. That’s under the 43.7 million average from Google Finance, but still kept BlackBerry active ahead of the U.S. holiday break.
| Market line | Latest cited level | Move |
|---|---|---|
| BlackBerry U.S. shares | $11.68 | down about 8.8% |
| Nasdaq Composite | 25,868.60 | fell 0.66% |
| S&P/TSX Composite | 34,917.77 | up 0.17% |
BlackBerry flagged a capital-structure problem for investors. The company said in its 10-Q that its common shares stayed above 130% of the notes’ conversion price for the necessary period, so holders can now convert their notes from July 1 through Sept. 30. BlackBerry can pay out in cash, stock, or some combination.
| Item | Figure | Investor read |
|---|---|---|
| Common shares outstanding at June 22 | 586.0 million | current base |
| Shares issuable on full note conversion | 51.5 million | would bump share count by 8.8% |
| 2026 buyback authorization | up to 26.8 million shares | covers roughly half of the potential conversion |
| Q1 repurchases | 2.6 million shares for $10.0 million | about 5% of possible conversion shares |
| Cash, cash equivalents and investments at May 31 | $422.9 million | gives cash to handle note or buybacks |
The pullback is key. BlackBerry’s market value was almost $6.8 billion during the price surge, making its notes stand out. At May 31, the notes were carried at $196.8 million, but BlackBerry pegged fair value at $441.1 million. That’s a jump from $241.7 million at Feb. 28.
Operations looked better than last year. Revenue was up to $152.9 million from $121.7 million in the May quarter. QNX pulled in $72.3 million, up from $57.5 million, and Secure Communications jumped to $73.6 million from $59.5 million. Adjusted EBITDA reached $36.3 million, up from $14.9 million. Free cash flow came in at $1.7 million, compared to a usage of $18.9 million a year ago.
BlackBerry CEO John Giamatteo told Reuters more QNX customers are moving toward next-gen software-defined vehicles, while the company sees “really healthy demand.” Reuters also said QNX’s future royalty backlog is nearly $1 billion and BlackBerry raised its full-year fiscal 2027 revenue guidance to $594 million-$621 million from $584 million-$611 million. Reuters
Analysts are divided on BlackBerry’s value right now. Stifel Canada’s Suthan Sukumar kicked off coverage with a Buy and a $12 price target, arguing that “the market misdefines BlackBerry” and calls it a software layer in the AI stack. But Morningstar’s William Kerwin, CFA, took his fair value estimate to C$7.30, writing that the stock is “still overvalued” after rallying more than 150% so far this year. investing.com
Secure Communications delivered another mixed set of numbers. ARR climbed to $220 million from $209 million, but dollar-based net retention held at 92%. The Secure Communications revenue beat this quarter was driven mainly by a $15.3 million jump in SecuSUITE product revenue, offset in part by softer UEM product revenue.
On the call, Giamatteo said growth “won’t necessarily be linear.” CFO Tim Foote said about 90% of extra revenue flowed through to adjusted EBITDA, and BlackBerry reported around $5 million in operating cash flow for the quarter. investing.com
BlackBerry is forecasting Q2 revenue at $137 million to $148 million, with adjusted EBITDA between $20 million and $30 million. The company guided for adjusted basic EPS of $0.03 to $0.04 and said operating cash flow will range from breakeven to $10 million.
