The limelight is having a damaging affect on BlackBerry (TSX:BB), and the company would probably be better served going private, says one noted analyst.
Mike Walkley, Senior Equity Analyst at Canaccord Genuity was on BNN’s “Business Day” this afternoon to talk about the company’s recent announcement that it is looking at strategic options, including the possible of the whole company, or parts of it.
Walkley says the bad PR that has become virtually synonymous with the Waterloo-based device maker may actually be wagging the dog, discouraging enterprise customers from buying BlackBerry products, which he thinks are in fact much improved.
“I think the announcement they made with the board looking at strategic options, taking them private might be the best step for them,” he said. “I think that gives them more time to retrench their business model. More importantly, it takes them our of the pubic limelight where they have to talk about market share losses to these other ecosystems. Because it’s hard to go into a sale to an enterprise if you are losing market share to Apple or Android and you have bad results to convince them to buy their security for the longer term.”
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Walkley says that in covering the space for fourteen years, he noticed that there are almost always two incumbents, and the remaining players have a hard time competing with their ecosystems.
“If you look at BlackBerry 10, it’s much better than BlackBerry 7,” he said. ” It’s a compelling product on its own, but with such a small ecosystem to compete against it has been really tough at the consumer channel to adopt these phones. Consumers walk into the store thinking they are going to buy an Android phone or an Apple phone, and what we have seen with our monthly survey work it has been very hard to convince them to try BlackBerry 10″.
Walkley says if BlackBerry were private it could retrench its business model and downsize, which he thinks would give management a better chance to turn around the company longer term.
But the Cannacord analyst isn’t exactly bullish about investors prospects to make money on the stock from here. He says his sum-of-the-parts analysis has the company at $8 a share, which is his current price target. “That’s a fair value for their assets,” says Walkley.
Shares of BlackBerry on the TSX closed today up 1.1% to $11.44.