BlackBerry share price jumps on news of potential buyers

on Oct 8, 2013
Updated: Oct 17, 2019
Listen Tuesday, October 8th: Shares in BlackBerry (NASDAQ:BBRY, TSE:BB) yesterday rose almost four percent on news of potential interest from strategic buyers and an analyst upgrade on the stock of the struggling Canadian smartphone maker.

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Investors pushed BlackBerry’ share price to as much as $8 in morning trading on the Nasdaq following a media report ( which said that several tech giants were in talks to buy the beleaguered smartphone manufacturer. According to unnamed sources quoted by Reuters, Google, Cisco Systems, SAP Intel, LG and Samsung, are among the companies interested in buying BlackBerry. It was unclear which parties will bid, if any. But the sources said the potential buyers have been especially interested in the Canadian company’s secure server network and patent portfolio, although doubts about the assets’ value remain an issue. The talks were reported to be separate from a conditional deal with a consortium led by Fairfax Financial Holdings, BlackBerry’s largest shareholder, to sell the company whole for $9 per share.

BlackBerry declined to comment on the media report, saying in a statement yesterday that the board’s special committee and its advisers were “conducting a robust and thorough review of strategic alternatives.”
**Stock upgrade**
The potential interest from strategic buyers, along with the recent decline in BlackBerry’s share price yesterday prompted Macquarie Capital analyst Kevin Smithen to upgrade his rating on BlackBerry to ‘neutral’ from ‘underperform’.

“With press reports over the weekend about Google, Cisco, SAP and Samsung doing due diligence on BlackBerry, we believe that last week’s fall well below Fairfax’s $9 stalking horse bid price has finally attracted enough interest from the global tech titans who may take a ‘punt’ on enterprise mobility,” Smithen wrote in a note to clients.

!m[Canadian smartphone maker’s stock upgraded on media report of interest from strategic buyers](/uploads/story/5937/thumbs/pic1_inline.jpg)
The analyst advised clients to hold on to BlackBerry’s stock until a deal is concluded. “We believe a $6 to $9 sale price range by year end to perhaps a consortium of buyers is the most likely outcome,” Smithen added.

In a separate note, Jefferies analyst Peter Misek, yesterday backed his ‘hold’ rating for the stock, saying that he believed BlackBerry could be sold in three pieces with its new BlackBerry 10 operating system and handset business attracting interest from an Asian handset makers like Lenovo or ZTE, the company’s BlackBerry Messenger platform attracting interest from the likes of Yahoo or Google, while its core enterprise business and network assets could get scooped up by the likes of IBM Corp, Cisco, Oracle or Hewlett-Packard. Misek added that while any of the interested parties could get something out of a BlackBerry acquisition, the company has yet to generate much interest. As a result, he still sees Fairfax as the likely winner.
**As of Monday, 07.10, buy BlackBerry shares at $7.99.**
**As of Monday, 07.10, sell BlackBerry shares at $7.97.**


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