Once touted as a Canadian success story, whose product was synonymous with innovative technology the world over, Waterloo, Ontario-based BlackBerry Inc. (TSX: BB, NASDAQ: BBRY) is at a crossroads, pondering whether to continue in its current guise or throw in its lot with one of its richer and, perhaps, more innovative rivals.
With the failure of its Z10 smartphone to provide enough of a spark to propel the company back to its former glory (when it was known as Research In Motion), BlackBerry is considering whether to sell to an interest who may yet take the company private, or to be swallowed up by some other suitor with nice, deep pockets.
The last installment in the BlackBerry drama occurred this week, amid reports out of the Wall Street Journal that the technology giant is considering launching an auction process, and sooner rather than later.
The list of likely buyers of BlackBerry’s assets has been slowly whittled down over the past week, after Microsoft (NASDAQ: MSFT) announced plans to buy Nokia Corp.’s handset division for $7.17 billion U.S.
The Journal piece claimed BlackBerry had already narrowed the list of potential bidders, a likely move after announcing last month that it would explore several "strategic alternatives" including a possible sale.
The investment industry Bible also cited unnamed sources as saying that an auction process could be completed as early as November.
The article also quoted those close to the process as saying that financial players in Canada and the U.S., such as Canada Pension Plan Investment Board and Bain Capital, are expected to consider bids, as well as some Asian tech companies including Chinese smartphone and computer maker Lenovo Group Ltd.
The Journal reported last week that the company is mulling over spinning off its messaging service, and also noted that a member of BlackBerry's special board committee suggested the company sell off what he called "subsets," without specifying which, and added that it could survive as a "niche company."
BlackBerry has hired J.P. Morgan Chase & Co. to run the sales process.
All in all, it promises to be an interesting autumn as investors and technology buffs see what comes down the pipe.
BlackBerry closed trading Friday in Toronto at $11.29 Canadian, down 31 cents or 2.7% from the previous session. The stock has traded in a 52-week range of $6.10 to $18.49 Canadian. BlackBerry closed trading in New York at $10.84 U.S., down 16 cents, or 1.4% from Thursday’s close.
