Blackberry stock price seems like a good speculative buy

Blackberry (NYSE: BB) stock price has staged a strong recovery in the past few months, making it one of the best-performing meme companies. The shares jumped to a high of $5.75 on Tuesday, the highest level since September 2022. They have risen by over 76% from the lowest level in December.

Why is Blackberry soaring?

Blackberry has emerged as one of the best-performing meme stocks this year. It is also one of the top companies in Canada’s TSX index this year. Other meme stocks like GameStop, ContextLogic, and AMC have languished this year.

Blackberry stock price has soared for two main reasons. The most recent is that the company could be acquired by Veritas Capital or another suitor. Veritas is a major private equity company with over $45 billion in assets. Its portfolio companies include Wood Mackenzie, Guidehouse, Epiq Solutions, and Coronis Health.

It is unclear whether Veritas will go on with the acquisition and whether a bidding war will happen. What is clear is that the company is on sale since it has already hired Morgan Stanley and Perella Weinberg as advisors. As such, this makes it a good speculative buy for now.

Blackberry has also sold some of its patents, in a lucrative deal worth almost $900 million. This was a good move since the 32,000 patents and applications. Also, according to the agreement, the company will also continue receiving a share of profits. Royalties will be capped at $700 million.

Second, Blackberry’s business is doing relatively well as evidenced by the recent financial results. The company’s revenue jumped to $373 million, better than what analysts were expecting. This growth was mostly because of its patent sales.

Other parts of the business showed some weakness. For example, cybersecurity revenue came in at $83 million, down from $113 million a year ago. Its IoT business revenue also dropped from $53 million to $45 million.

Blackberry’s balance sheet has improved, with its cash soaring to $578 million. The challenge is that it needs some substantial cash in November to pay its convertible debt. But with the stock rising, there is a likelihood that the creditors will convert it into shares, leading to some dilution.

Blackberry stock price forecast

The daily chart shows that the Blackberry share price has been in a strong bullish trend in the past few months. It is now trading at an important resistance level where it struggled to move above in May and June.

The shares have moved above the 61.8% Fibonacci Retracement level. They have also moved above the 50-day and 200-day moving averages. Therefore, Blackberry seems like a good speculative buy. If this happens, the next level to watch will be at $6.33, which is ~13.6% above the current level.