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BlackBerry seen burning through its cash pile in just 18 months

Published Oct 4th, 2013 7:00PM EDT
BlackBerry $2.6 Billion Cash Reserves

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How big of a bonfire can you make with a $2.6 billion cash pile? We may be about to find out. AllThingsD points us to a research note from Bernstein Research analyst Pierre Ferragu, who says that BlackBerry is on pace to torch $2 billion in cash over the next six quarters, largely because “the company is losing users at a very high pace, has a stretched working capital and massive off-balance-sheet commitments that will turn into cash burn in the next four quarters.”

Ferragu also thinks that this could complicate Fairfax Financial’s plan to buy off the company at $9 per share since many potential investors will get spooked by the company’s deteriorating cash position. In its second-quarter earnings released last week, BlackBerry revealed that it burned through $500 million in cash in just one quarter so a continued burn over the next six quarters seems plausible.

Brad Reed
Brad Reed Staff Writer

Brad Reed has written about technology for over eight years at BGR.com and Network World. Prior to that, he wrote freelance stories for political publications such as AlterNet and the American Prospect. He has a Master's Degree in Business and Economics Journalism from Boston University.

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