BlackBerry Going Private? Still Not a Good Time to Buy: Jeff Macke
BlackBerry (BBRY) just wants some privacy. According to Reuters, the smartphone company is considering finding a buyer and taking itself private. Moving from the public to private sector would give Blackberry some space to focus on innovation without having to worry about share price.
The company, once the toast of the smartphone market, has seen better days. Shares have fallen 19% this year and its market value is currently $4.8 billion, down from $84 billion in 2008. BlackBerry has struggled to keep up with competition from Apple (AAPL), Google (GOOG), HTC and Samsung.
The new BlackBerry 10 phone has not turned around the company's fortunes as many shareholders were desperately hoping for. The company lost 4 million subscribers and shipped just 2.5 million BlackBerry 10 units globally in the first quarter.
Related: Here’s The Secret Private-Equity Plan For Dell
Shareholders seem to agree that going private is the right thing for the company to do. BlackBerry’s stock rose more than 10% in premarket trading on the rumor. Breakout’s Jeff Macke also agrees: “BlackBerry has a lot of cash and no business model,” he tells The Daily Ticker's Lauren Lyster.
But he isn’t so sure that the rumors are true.
“Is BlackBerry saying they’re open to the idea? Of course they are, it’s a public company, they have to say they’re open to the idea. Is someone going to do it? I don’t know...I’m not buying the stock up 10%,” he says.
Related: Don’t Invest in Blackberry: Brian Sozzi
So is there hope for BlackBerry?
“They’ve got some patents that they’re going to try to use because they know the [BlackBerry 10] was a flop,” says Macke. “So they’ve got some ideas and they’re going to try to sell their patents but the problem is those patents don’t really have any value.”
BlackBerry has recently been in talks with private equity firm Silver Lake Partners. Silver Lake has gained notoriety over its $25 billion bid to privatize Dell (DELL).
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