Even in Break-Up Scenario, BlackBerry (BBRY) is Just About Fully Valued

August 21, 2013 6:54 AM EDT
Just how much would BlackBerry (Nasdaq: BBRY) be worth in a sale?

Analysts on average see BlackBerry going for around $5 billion, which is just about in-line with its current market cap.

Analysts think that BlackBerry's patents and software carry a value of $1 billion, while the company also has about $2.8 billion in cash. Most purchasers would also shut down the company's hardware business at a cost of around $800 million. Of course, fewer customers purchasing BlackBerry hardware over the next few months would mean value on that unit has a real risk of further decline.

Value, even in a break-up case, is somewhere around $10.50 per share.

Though BlackBerry has a good amount of cash, expectations for a loss this quarter and a loss last quarter could see that asset deplete. The company hasn't issued debt to finance operations and any potential bankruptcy wouldn't happen for several quarters, at minimum.

BlackBerry officials announced formation of a committee last week to evaluate strategic options for the company. The announcement came following the company secretly evaluating strategic options for around a year prior to the announcement, with no real interest being expressed in purchasing the entire company. IBM (NYSE: IBM) was said to make an informal approach for BlackBerry's enterprise-services business last year, but nothing was put in ink.

Shares of BlackBerry are slightly higher Wednesday morning.

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In

Related Categories

Insiders' Blog, Mergers and Acquisitions, Private Equity

Related Entities



re: but nothing was put in ink.
ii on 2013-08-22 13:45:45
Mark as Spam | Reply to this comment

That says it all. How all these reporters can publish so much on so little factual research is mind boggling.

Add Your Comment