Blackberry Shops the Company – Too Little Too Late?

Trading was briefly halted this morning, so an emergency strategy meeting could take place.

BB Stock-01BB Stock-02

I’ve been talking about the demise of RIM – now called Blackberry Corporation – for quite some time now.  In fact, if you recall, I called this over a year ago.  Blackberry was in trouble then; and quite honestly, nothing that they’ve done has had the force or power to turn the ship around. They’ve got an arduous decision in front of them.

Steve Ranger from ZDNet had an interesting column with 5 different suggestions for the company. I’m obviously not going to regurgitate what he said, but I do have my own take on most of these. I’ll make it brief; but I’m putting on my thunderwear for this. The time for candy coating everything is long gone.
According to Steve, Blackberry can:

  • Form partnerships
  • Go Private
  • Shop and Eventually Sell the Company
  • Break Up
  • Do Nothing

Form Partnerships
Whether on a client-by-client basis or with a larger player, RIM could seek out potential hardware partners like Samsung, HTC (a personal favorite of mine in this scenario), Microsoft or Apple. There are pros and cons to all of them

If I were Samsung, Apple or Microsoft, I’d pass on the partnership deal. Blackberry has too much going against it right now to attract any of these larger players as a partner, though Apple might want to partner with them to handle sync solutions for PIM data that might be integratable into a point release of OS X Mavericks and iOS 7 or later. If I were Samsung or MS, I’d look to acquire the company outright, which MS has tried to do on more than one occasion. Blackberry was never too keen on.  Big mistake on their part at this point, I think…

HTC could be the best choice of a partner, as they need something to help pull them out of the deep end of the pool.  They are also the potential partner that is likely to take the most risks and be the most flexible. Neither Samsung, Apple nor Microsoft NEEDS anything right now.  They’d probably take a majority share and just tell Blackberry to shut up and sit there… I would if I were any of those three.

Go Private
Without a major revamp in strategy, the company doesn’t have a snowball’s chance of surviving. They’re profitable, but only for as long as they can convince customers to keep buying their services. Eventually, they’re going to run out of steam. It’s just a matter of time.

Going private isn’t an option without a huge strategic shift. Blackberry hasn’t shown the potential to do this in the past 5 years. If they can do it now, I’d call for the removal of Thorsten Heinz. A strategic shift of that magnitude should have been done in the 2008/2009 time frame. No excuses…

Shop and Sell the Company
If I were MS, I’d adjust their last offer for stock price and try one last time. They have the cash, and Blackberry really can’t turn down any serious offer at this point.  I would also bid for the whole damn thing, too. Thorsten Heinz has turned his nose up at Ballmer twice since 2008, but a melding between Microsoft and Blackberry could do a lot for Windows Phone and could give it a huge boost.

As I mentioned, Samsung and Apple could and probably should also bid for the assets, including the IP that may still provide income. Blackberry’s future may not be bright, but there something there that may be of value to a larger mobile player.

Break Up
As I just said, their IP and other assets have some value. This is a real option for them. Their stock price as of 1130am Central Time as 10.25, up nearly a 1/2; but it had 6.6x that value in February 2011, just over 2 years ago.

Breaking up should be considered a last resort, if they can’t get any real cash in either the partnership or sell categories. The assets are likely to get spread around to too many companies, and then the value is greatly reduced

Do Nothing
This is clearly not an option. Heinz was brought in to turn around the company after its co-CEO’s did nothing and nearly ruined the company.

You don’t’ just halt trading on a publicly traded company. Something serious is up; and while there haven’t been any major announcements made on the results that I can see, its clear Blackberry’s time is almost up. Back in 2008, it thought Microsoft’s bid of $50 per share undervalued the company. They’ll be lucky to get 12 or 15 at this point, let alone 20-25 (which would be half the original bid).

I think the time has come. Heinz gave it a good go; but he hasn’t done anything to successfully turn the company around; and unfortunately, BB10, Blackberry’s new mobile operating system hasn’t seen any notable success.

The writing’s on the wall, we’ll miss Blackberry…maybe.

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