Could the well-known Canadian smartphone manufacturer BlackBerry have a new owner very soon?
Several sources have mentioned that Prem Watsa, the largest shareholder of BlackBerry with a current holding of 10%, is interested in taking over the entire company. He resigned from the company’s board last month due to potential conflicts of interest related to BlackBerry’s search for strategic options. This action has led to speculation that Mr. Watsa is thinking of making an offer.
Several other private equity firms have also shown their interest in patents and other intellectual properties held by BlackBerry.
One of the main reasons that BlackBerry is so respected by tech experts and why acquirers are interested is that BlackBerry is one of the few smartphone manufacturers that produce a device that cannot be hacked by the NSA (the United States National Security Agency). It has been stated that to hack BlackBerry’s network with a brute-force attack would take roughly four million years. This enhanced cryptography makes it one of the safest smartphones available on the market today.
The company recently launched its newest smartphone, the BlackBerry Z30. This cutting-edge 5-inch smartphone comes with new features like a priority hub software which recognizes the user’s most important contacts and collects them in one place. It also has stereo speakers for the audiophiles out there.
It is probably the best device that BlackBerry has launched so far. Still, it’s unclear if it will succeed against the competition as Apple recently launched its iPhone 5s and 5c devices, which are now available at both retail and internet stores around the globe. Huge lineups have been reported at Apple stores throughout the US. As for BlackBerry, the unclear status of the company itself doesn’t help to support sales of its devices. Shoppers are worried about after-sales customer care.
Although BlackBerry has made a strong push to launch devices with more to offer and a closer resemblance to Apple and Android smartphones, it still has to prove itself in the European and the Middle East markets, where the Z30 will be launched first.
Adding to troubles, last week BlackBerry announced a major job cutback of around 4,500 and stated that it expects to record a loss of approximately $950 and $995 million in its quarterly earnings report to be released next Friday. On the day of the announcement BlackBerry’s stock (TSX:BB) closed at $9.08 – down more than 16%. It may now start to look more attractive to value-seeking investors with a stomach for volatility. The difficult exercise will be to pin down a reasonable valuation for BlackBerry.
[yop_poll id=”2″]