Out of the woods and Blackberry are a phrase and a word that should not be in one sentence, except this one. Blackberry recently announced that they were open to a sale. This is after the OS overhaul and new devices into the market running the new OS BB OS10 failing to hit the right spot with consumers.
Even with the new features, Blackberry has still failed to reinvent the business and regain the glory days. New reports now indicate that Blackberry could be facing a breakup, and that it’s inevitable.
Brian Huen of Red Sky Capital Management attributed this drop in value by the announcement that they were open for sale, even before anyone shows interest in you.
“Nobody is interested in buying the entire entity. I think they are now in the phase of saying, ‘We will do anything to maximize value, including breaking up the company”,” added Brian.
Bloomberg’s Hugo Miller reports that Blackberry’s main money maker, the handset business would have zero value in-case of a breakup.
“If a buyer closed the hardware unit in favor of its own technology, it would cost about $800 million, said BMO Capital Markets. BlackBerry’s patents, software and a secure network are each worth more than $1 billion, BMO said, and the company has about $2.8 billion in cash.” says Hugo.
Blackberry market-share is currently at 2.9% and things seem not to be improving. Business-wise, the value of Blackberry stock went down upon the announcement that they were open to sale.
Source: Bloomberg
