After years of falling sales, failed revamps and a dwindling user base, BlackBerry (BBRY) is finally considering putting itself up for sale. In a statement released Monday, the struggling Canadian smartphone maker said its board has set up a special committee and has hired JP Morgan (JPM) to look at “strategic alternatives” — including a possible sale. BlackBerry’s stock spiked almost 11 percent at the close in New York, marking the biggest one-day gain since March.
For Wall Street, the news is no surprise. The company that lost $84 million in the last quarter and announced 5,000 layoffs last year is still bleeding subscribers and it faces an uphill battle to regain market share from Apple (AAPL) and phones that run Google (GOOG)’s Android operating system. Last week, a report from IDC pegged BlackBerry’s share of the global smartphone market at just 2.9% in the second quarter of this year, compared to Google ‘s 79% and Apple’s 13.2%.
According to Reuters, BlackBerry is currently worth about $5 billion, but many of its investors like Ross Healy, who is chairman of Toronto-based financial advisory firm Strategic Analysis Corp. and a BlackBerry shareholder, believe that the company has more than $3 billion in cash alone.
“My own analysis tells me that the stock is worth an awful lot more than $5 billion,” said Healy who sees IBM (IBM) Google or Microsoft (MSFT) as companies that could step in and help shore up BlackBerry.
A report by The Wall Street Journal seems to back Healy’s assertion as a number of bankers who have looked at BlackBerry said “it is an unlikely target for a private-equity firm, because of the continuing decline of the company’s device business. Advisers working with the company are eyeing other potential tech companies as the likely buyers”.
Shares in BlackBerry, formerly called Research in Motion, traded for more than $227 in July 2007 and closed on Monday at $10.78, up $1.02, or 10.45%.
BBRY is up 17% in the last month, down 29% in the last six months, and down $2.49, or 30%, since this time last year. The company has a market cap of $5.65 billion.
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