Rumors that BlackBerry would settle its litigation with Facebook (NASDAQ:FB) sent the stock up by 30% in the last week. The company has weak growth fundamentals ahead in its core business. But a cash settlement or patent revenue deal with Facebook would replenish BlackBerry’s balance sheet.
BlackBerry sued Facebook in 2018 over patent infringement. It accused Facebook of using its messaging capabilities. WhatsApp, Instagram, and Facebook app allegedly used BlackBerry technology. Later that year, Facebook accused the social-media monster of stealing its voice messaging technology.
Facebook is facing a massive exodus of users. It updated its terms of use that frightened its users. The firm said its messaging users must permit the parent – Facebook – to access its data. Though it cannot do the same in all countries, the firm sent the updated terms of use to every user.
Facebook settling with BlackBerry takes away a distraction. Still, the giant may easily let the accusations drag on in court instead. Speculators could bet that if it settles, then BB stock will recover for the long-term. The firm could re-enter the smartphone market.
BlackBerry’s core mobile device management software and security, through Cylance, are showing modest growth. Re-entering the smartphone market would re-energize the brand.
