Why BlackBerry will be sold for less than $9 per share
By Paul Ausick | 24/7 Wall St. – 23 hours ago- The Canadian Press - In this Jan. 30, 2013 photo, BlackBerry's employees are pictured in London. THE CANADIAN PRESS/AP, Lefteris Pitarakis
RELATED QUOTES
| Symbol | Price | Change |
|---|---|---|
| BBRY | 8.03 | -0.50 |
Prospective buyers have not exactly been lining up to challenge the
$9 per share offer to take smartphone maker BlackBerry Ltd. (BBRY)
private. The offer, from Fairfax Financial Holdings, which owns 10% of
BlackBerry, originally might have been viewed as a stalking horse bid
for the phone maker, but it is conceivable that we are looking at what
could be a high bid.
Current shareholders certainly appear to think so. Shares are trading at around $8.58 late Tuesday morning, a clear indication that investors doubt that the $9 bid will hold up. Fairfax chairman Prem Watsa was also chairman of BlackBerry’s board until he resigned after the company said it would explore strategic alternatives, including a sale of the company. Watsa is believed to be putting together financing for the offer with the Canada Pension Plan Investment Board, Bank of America/Merrill Lynch and BMO Capital Markets.
Watsa and his financiers have until November 4 to conduct due diligence, and a lot could happen during these next five weeks. Or, more likely, nothing will happen. No other bids could be forthcoming, the share price could continue to slide, or the financial players could decide to just walk away.
None of that is too difficult to imagine. Especially because there does not appear to be any reason to value BlackBerry at $4.7 billion. The company’s value now lies almost entirely with its intellectual property. The phones are not selling, and the new Z30 touchscreen phone is not going to change that. Buyers will stay away in droves, proving once again the truth expounded by the sage of New York, Yogi Berra: “If people aren’t going to come to the ballpark, you can’t stop them.”
Current shareholders certainly appear to think so. Shares are trading at around $8.58 late Tuesday morning, a clear indication that investors doubt that the $9 bid will hold up. Fairfax chairman Prem Watsa was also chairman of BlackBerry’s board until he resigned after the company said it would explore strategic alternatives, including a sale of the company. Watsa is believed to be putting together financing for the offer with the Canada Pension Plan Investment Board, Bank of America/Merrill Lynch and BMO Capital Markets.
Watsa and his financiers have until November 4 to conduct due diligence, and a lot could happen during these next five weeks. Or, more likely, nothing will happen. No other bids could be forthcoming, the share price could continue to slide, or the financial players could decide to just walk away.
None of that is too difficult to imagine. Especially because there does not appear to be any reason to value BlackBerry at $4.7 billion. The company’s value now lies almost entirely with its intellectual property. The phones are not selling, and the new Z30 touchscreen phone is not going to change that. Buyers will stay away in droves, proving once again the truth expounded by the sage of New York, Yogi Berra: “If people aren’t going to come to the ballpark, you can’t stop them.”
BlackBerry’s shares are trading down about 2.7% to $8.58 before noon, in a 52-week range of $6.25 to $18.32.
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15users liked this commentPlease sign in to rate a Thumb UpPlease sign in to rate a Thumb Down1users disliked this commentRed • Report Abuse
just another yahoo bashing BB
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6users liked this commentPlease sign in to rate a Thumb UpPlease sign in to rate a Thumb Down0users disliked this commentDave • Report Abuse
yep once again yahoo strikes with articles that mean nothing but is just another thinly veiled attack against a canadian firm.. It seems we can never have a company that is leading the pack, we have to attack it till the consumer decides it is not worth buying and thus we destroy it. As much as... More
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5users liked this commentPlease sign in to rate a Thumb UpPlease sign in to rate a Thumb Down0users disliked this commentDolby • Report Abuse
get away from the crooked stock market. Period.
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14users liked this commentPlease sign in to rate a Thumb UpPlease sign in to rate a Thumb Down3users disliked this commentguy • Report Abuse
the short sellers, Google, Apple, Windows, Samsung, etc. are so blatantly controlling the media - BP didn't have this much negative press when they spilled oil in the Gulf of Mexico. I have the Z10 and its better and easier to use than the IPhone. Apple is the most expensive company (or recently... More
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15users liked this commentPlease sign in to rate a Thumb UpPlease sign in to rate a Thumb Down5users disliked this commentnorthernteacher • Report Abuse
Garbage. Got rid of my Apple experiment and have gone back to the Z10. It is faster and easier to use.
5 Replies -
17users liked this commentPlease sign in to rate a Thumb UpPlease sign in to rate a Thumb Down5users disliked this commentHao • Report Abuse
Agreed. Just an opinion with NO analysis. Not convincing one way or the other.
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9users liked this commentPlease sign in to rate a Thumb UpPlease sign in to rate a Thumb Down2users disliked this commentChris • Report Abuse
rubbish!
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14users liked this commentPlease sign in to rate a Thumb UpPlease sign in to rate a Thumb Down4users disliked this commentNoreen • Report Abuse
WHAT A BUNCH OF BULL FROM AN AMERICAN BULL SH...R
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7users liked this commentPlease sign in to rate a Thumb UpPlease sign in to rate a Thumb Down2users disliked this commentNELS • Report Abuse
Share holders are getting a bad deal any way you look at.
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2users liked this commentPlease sign in to rate a Thumb UpPlease sign in to rate a Thumb Down0users disliked this commentIcon • Report Abuse
WOW-what a drab article. I am experienced in all phone types and I can honestly say Z10 is a s good or better than them all. Its a rock solid device and so simple to use.
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