Struggling smartphone maker BlackBerry said that it was exploring its "strategic alternatives", including a potential sale of the company. The decision, which had long been expected by investors, follows almost three years of steadily worsening news from the once-dominant tech firm, as it loses market share to rival platforms. Shares rose 10.5% after the announcement, but remain down 80% over the last three years.
What the commentators said
While BlackBerry's new models have made little impression, the data "show there is space for a third mobile operating system after Apple's iOS and Google's Android": Microsoft's Windows Phone has doubled sales. BlackBerry had a chance of retaining that niche. It may have failed "but taking its best shot was the correct choice".
The fact that a sizeable part of the market is still up for grabs suggests that a deep-pocketed rival might still fancy buying up BlackBerry and trying to turn it around, said Robert Cyran on Breakingviews. But this is fraught with risks: "Hewlett-Packard had the same idea with Palm in 2010 and wound up writing down about three-quarters of the $1.2bn it spent". Nor is the company a promising candidate for a leveraged buy-out; while it currently has a strong balance sheet ($3bn in cash and zero debt) and is still generating cash, it's hard to be confident that will continue as market share and margins worsen.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
So who might buy BlackBerry? Despite the albatross of the handset business, the firm has valuable assets, such as a patent portfolio worth up to $1.5bn, according to broker Jefferies, and the large user base of services, such as BlackBerry Messenger. That suggests the most value may come from breaking the firm up and selling it to trade buyers, suggested Andrew Orlowski on technology news site TheRegister.co.uk.
-
8 of the best properties for sale for around £1 millionThe best properties for sale for around £1 million – from a Grade II-listed former watermill in Torpoint, Cornwall, to a two-bedroom apartment close to London’s Kensington High Street
-
Inheritance tax reforms: government urged to rethink curbs on rural reliefsMPs want the government to delay changes to inheritance rax reliefs for farmers
