Break-up may be the only way out for BlackBerry: analysts

Mon Sep 23, 2013 12:54pm EDT
 
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(Reuters) - BlackBerry shares were set to open 3 percent lower on Monday after it warned of a huge quarterly loss and at least 15 brokerages slashed their price targets.

The only question was whether the company would be sold in one piece or in parts, analysts said.

BlackBerry said on Friday it expected to report a net operating loss of almost $1 billion in the quarter ended August 31, largely due to writedowns on a mountain of unsold BB10 phones.

Brokerage National Bank Financial, which believes that any recovery is very unlikely for BlackBerry, cut its price target to $5 from $8, valuing the company at about $2.6 billion.

That would be a far cry from its 2008 peak of $80 billion when BlackBerry was the major player in corporate email and Apple Inc was just launching its iPhone.

BlackBerry's U.S.-listed shares, which fell 17 percent on Friday and have nearly halved in value since February, were trading at $8.23 pre-market.

In a note titled "Train has wrecked, what now?" analysts at Evercore Partners said BlackBerry would be worth more if its software businesses were split from its declining hardware business.

The company has been losing market share as smartphones powered by software made by Apple and Google Inc started dominating the market.

Apple said on Monday it had sold about 9 million iPhone 5s and iPhone 5c models in the first three days since their launch, with demand exceeding initial supplies.   Continued...

 
Men wearing employee tags walk on the sidewalk in front of the BlackBerry campus in Waterloo September 23, 2013. REUTERS/Mark Blinch