BlackBerry (TSX:BB) has more options available to them than some would lead you to believe, says one technology analyst.
Ron Shuttleworth, analyst at M Partners was on BNN’s “The Close” with host Michael Hainsworth yesterday and talked about the struggling device maker.
Shuttleworth says the key difference between BlackBerry and many other companies that put themselves on the block is that it has a significant cash buffer.
“With that much money in the bank they have a lot more options that somebody who is running out of cash,” he says.
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The M Partners analyst say a bigger real concern is that they probably have a lot of inventory built up right now because the U.S. launch of BlackBerry 10 wasn’t as successful as they had hoped.
Shuttleworth, who does not cover BlackBerry because he says he sees better returns from Canadian smallcap technology companies, thinks the most likely scenario is that it goes private.
On June 28th, BlackBerry reported results for the three months ended June 1st. The company lost $84-million on revenue of $3.1-billion. At that time, the company had $3.1 billion in cash and short term investments.
On August 12th, 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. Some analysts speculated that companies looking to build their mobile presence, such as Dell, HP, or IBM, would be a strong strategic fit.
At press time, shares of BlackBerry on the TSX were down 1.7% to $10.68.