BlackBerry Stock Spikes Amid Acquisition Rumors7:04 PM EST Mon. Oct. 07, 2013
BlackBerry stock rose 4.5 percent Monday morning, a spike that seems at odds with the company's recent trend on Wall Street, considering the last several weeks have delivered little more than crippling knocks to the weakening mobile hardware, software and services company. Recent acquisition rumors appear to be at the center of the stock surge, but some analysts are doubtful those rumors will pan out.
An initial report from Reuters said BlackBerry has reached out to companies including Google, SAP and Cisco in regards to a full or part acquisition of the company.
"This is all speculation and rumor," said Gartner analyst Ken Dulaney in an email to CRN. "I think that all of these [companies] would find managing BlackBerry more complicated than just hiring the people away. None of [the aforementioned companies] would be interested in the hardware business and that is the big part of the company."
BlackBerry, in a statement emailed to CRN, cited a market study conducted by J. Gold Associates that states "BlackBerry remains the most strategic mobile device management solution for enterprises today, including Fortune 500 companies such as ADP and Met life."
According to Jack Gold, founder and principal analyst of Northborough, Mass.-based research and analytics firm J. Gold Associates, the study BlackBerry referenced was conducted in October and November of 2012 and revealed that 28 percent of the surveyed companies sited BlackBerry's BES 10 as its strategic mobile platform, far and above any other mobile device management platform.
The same 2012 study projected 21 percent of the surveyed companies would operate on BES 10 in 2013 followed by 17 percent in 2015.
Both Dulaney and Gold deemed it feasible that the company could be broken up and sold off as pieces. Specific pieces may be attractive to companies like Cisco, SAP or Google.
Specifically, Gold said it would be highly unlikely that Cisco would be interested in BlackBerry's hardware business. That Cisco would possibly invest in BlackBerry's secure network environment, for example, is more likely but not plausible, he said.
Similarly, Gold said SAP may show interest in the BlackBerry patent portfolio but more likely would benefit from acquiring the BBM service.
Google, Gold said, may also be interested in adding BlackBerry's patent portfolio or hardware to its Motorola business or leveraging the network of BBM users and adding it to its own user base. Even when taking those options into consideration, Gold said he is not convinced it is enough for Google to bid on BlackBerry.
NEXT: BlackBerry's Road To The End
BlackBerry revealed to the public in August that it had begun seeking what the company called "strategic alternatives." At the time, options included taking the company private, joint ventures, partnerships or an outright sale.
By early September, BlackBerry had begun discussions with potential buyers, including an assortment of financial firms and IT companies, for a potential sale of the company by November. Chinese hardware company Lenovo was listed as a potential acquirer.
A few weeks following BlackBerry's buzz about seeking potential acquisition suitors came the company's second-quarter earnings report in which CEO Thorsten Heins disclosed to investors how much damage the company was truly looking at.
The report showed a $934 million write-off and subsequent plans to lay off 4,500 employees. After which, stocks plummeted, and on Friday a class-action lawsuit was filed against the company for misleading investors to support the failing company based on "artificially inflated prices."
With less than $2.5 billion left in the bank, BlackBerry's days are numbered. Fairfax Financial Holdings, BlackBerry's largest investor, placed a $4.7 billion offer on the table to take the company private. The company was given until Nov. 4 to seek alternative options, an opportunity Reuters' report suggests the company is taking seriously.
Regardless of which route BlackBerry eventually takes, or rather which company takes BlackBerry, enterprises are already feeling the pressure to jump ship from BlackBerry in the face of what is shaping up to be the final chapter for the Waterloo, Ontario-based company.
PUBLISHED OCT. 7, 2013