BlackBerry shares drop after Pentagon clarifies it did not order 80K new BlackBerry phones

BlackBerry (NASDAQ:BBRY) shares fell 3 percent Thursday following a clarification by the Department of Defense that it did not, in fact, order 80,000 new BlackBerry phones, as some reports claimed earlier in the week. The original reports sent BlackBerry shares soaring up as much as 5 percent. (The stock is currently trading at a little under $10 per share in late-morning trading.)

The confusion started after the Defense Information Systems Agency, a Pentagon agency, said in a Jan. 16 press release that it would launch a new mobile network that would support 80,000 BlackBerry devices as well as 1,800 iPhones, iPads and Android devices. Many news outlets took that to mean the Pentagon activated 80,000 new BlackBerry phones, even though the press release never explicitly stated that was the case.

However, as The Verge first clarified, the DoD is merely using phones that it already had in its possession. Additionally, the DoD also did not say whether those supported phones are running the new BlackBerry 10 platform or the older BlackBerry 7 operating system.  

"Absolutely no new orders have been placed for new BB devices," the DoD said in a statement to The Verge. "The DISA press release put out Jan. 16 never alluded to any devices being purchased. The 80,000 BBs and 1,800 non-BB devices referenced in the release are legacy systems already in DoD inventories."

Had the Pentagon actually purchased 80,000 new BlackBerry phones, the company would likely have been quick to mention it, since it notes sales as small as 1,000 units. However, even an order of 80,000 phones isn't likely to do much for BlackBerry's bottom line, since the firm lost $4.4 billion last quarter.

Earlier this week, BlackBerry said it will divest the majority of its real estate holdings in Canada, though the smartphone maker has said it will continue to have a strong presence in the country that it calls home. The move is the latest that BlackBerry CEO John Chen has taken to reshape and refocus the company since taking the reins in November.

"While we believe that the company will likely lease back the majority of the facilities, we think that the move aligns with CEO John Chen's shift to enterprise-focused software (asset-lite) and more importantly, further fortresses the balance sheet," Wells Fargo analysts Maynard Um, Munjal Shah and Santosh Sankar wrote in a research note.

For more:
- see this The Verge article
- see this WaPo article
- see this CNN Money article

Related Articles:
BlackBerry to sell most of its Canadian real estate
BlackBerry's Chen aims to get Android, iOS and even Windows Phone customers using BlackBerry for enterprise
BlackBerry parts ways with creative director Alicia Keys
BlackBerry posts $4.4B loss, strikes deal with Foxconn
BlackBerry names former SAP exec to lead its enterprise biz
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