Click to Skip Ad
Closing in...

BlackBerry said to be destined for breakup, phone business called ‘essentially worthless’

Zach Epstein
August 21st, 2013 at 12:25 PM
BlackBerry Breakup Analysis

With BlackBerry getting desperate, a new report claims that a breakup may be inevitable at this point. BlackBerry is beyond difficult to value right now but according to some industry watchers, any remaining value plummeted when BlackBerry announced it is exploring a possible sale. “You’re effectively killing that business by saying ‘I’m up for sale,’ ” Red Sky Capital Management’s Brian Huen told Bloomberg on Wednesday. “Nobody is interested in buying the entire entity. I think they are now in the phase of saying, ‘We will do anything to maximize value, including breaking up the company.’ “

Analysts at Raymond James and BMO agree that a breakup is likely coming, and they don’t expect BlackBerry’s struggling smartphone business to make it out alive.

“The phone unit, BlackBerry’s biggest source of revenue, is essentially worthless because most buyers would shut it down in favor of their own technology, at a cost of as much as $800 million, said analysts at Raymond James Ltd. and BMO Capital Markets,” Bloomberg’s Hugo Miller wrote. “Its patents, software and a secure network are each worth more than $1 billion, the analysts said, and the company has about $2.8 billion in cash.”

Earlier reports suggested that there is still much more value left in BlackBerry and the huge discrepancies among analysts can likely be attributed to the fact that BlackBerry is currently next to impossible to value.

Zach Epstein

Zach Epstein has worked in and around ICT for more than 15 years, first in marketing and business development with two private telcos, then as a writer and editor covering business news, consumer electronics and telecommunications. Zach’s work has been quoted by countless top news publications in the US and around the world. He was also recently named one of the world's top-10 “power mobile influencers” by Forbes, as well as one of Inc. Magazine's top-30 Internet of Things experts.

Popular News