September 3rd Update: With Microsoft having purchased Nokia’s smartphones and services unit, the company many thought was the top candidate to buy BlackBerry is off the market. Midway through last month, Corkmark analyst Richard Tse speculated on who the most likely buyers for the Waterloo-based device maker would be…
The newly on-the-block BlackBerry (TSX:BB) has a surprising amount to offer a potential buyer, says Cormark analyst Richard Tse.
This morning the Waterloo-based company shocked the market when it said it had hired JP Morgan to consider strategic alternatives, including the potential sale of itself.
Tse says his take on the news is that this probably means that BlackBerry 10 sales aren’t going well, and that another round of restructuring is on the way.
But while the atmosphere may now be charged with an air of desperation, BlackBerry still has a whole lot to offer a potential buyer, says the Cormark analyst. He says that any player without a meaningful mobile presence, such as Dell, HP, or IBM should take an immediate interest in BlackBerry’s wireless operating systems (“not just in consumer market but industrial applications around M2M”), its IP portfolio, and its global carrier network.
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Tse says the rumours about Silver Lake Partners, who were hired by Dell to take that firm private, meeting with BlackBerry management makes imminent sense because he thinks BlackBerry’s services business, freed of the “drag” of the hardware segment, could generate $1-2 in EPS, and instantly give Dell a “broad mobile services platform”.
Rumours about BlackBerry partnering or selling itself off are, of course, nothing new. But Tse says today’s announcement pretty much lays plain that the company recognizes it must now take real action to preserve what value remains. In a research update to clients this morning, the Cormark analyst reiterated his BUY rating and (U.S) $13.50 one-year target on BlackBerry.
Shares of BlackBerry on the Nasdaq closed today up 10.45% to $10.78.