BlackBerry Could Pull A Dell - Buy Now

| About: BlackBerry Ltd. (BBRY)

With BlackBerry (NASDAQ:BBRY) apparently now "in play", you're hearing all the "what-if" scenarios:

*What if Cisco (NASDAQ:CSCO) . .

*What if Sony (NYSE:SNE) . .

*What if Microsoft (NASDAQ:MSFT) buys it?

Any of these companies might buy BlackBerry, or none of them. The impact on its stock price is hard to guess in any case. But the road to one possibility is now being tested at Dell (NASDAQ:DELL) and founder Michael Dell.

If BlackBerry were taken private, could this mean a return of Research In Motion founder and former Co-CEO, Mike Lazaridis?

Return of the founder

There's talk that Prem Watsa, head of Fairfax Financial Holdings (OTCPK:FRFHF), could possibly be involved in a privatization bid for the company. Consider:

*Watsa's firm owns 10% of BlackBerry.

*Lazaridis holds 5.7%.

*Watsa and Lazaridis are friends.

Lazaridis didn't sell his shares when he stepped down. If BlackBerry is his baby - and doesn't want to see it die - he might be looking to return. If to the board, or an executive position, maybe he could come in as chief technology officer and "overall visionary".

Putting a brilliant guy like Lazaridis on visionary industry changes in the machine-to-machine (M2M) could dramatically increase BlackBerry's chances of success. (CrackBerry)

BlackBerry made big mistakes

BlackBerry, the company that paved the way for the smartphone industry, recently changed its name from Research in Motion and revealed it is considering "strategic alternatives". That would include selling itself, whole or in pieces. How did it get left behind?

The company's biggest blunders include:

  1. Ignoring touchscreen-sticking with "qwerty" keyboards with its supposed lock on corporate accounts.
  2. Missing out on apps-Apple (NASDAQ:AAPL) and Android devices makers invited app designers to build programs for their handsets, BlackBerry kept app development to themselves.
  3. Assuming customer loyalty-believing they had an "unbreakable stronghold on corporate email", assuring theirs would remain the default device of choice.

When Apple's iPhone was introduced in 2007, BlackBerry stock was at $67 a share. Now it trades under $11. Revenue for fiscal year 2012 was down 45% from 2010. Apple's app store had revenues last year topping $9 billion; by 2016 they could be $22 billion.

BlackBerry owned 45% of the U.S. smartphone market in 2008. Currently its share is 2.7%, down from 5.2% a year ago. At its 2011 peak it shipped more than 52 million BlackBerrys; that dropped to 33 million units in 2012. Meanwhile:

*Android phones have a 79% share with Samsung (OTC:SSNLF) and other manufacturers shipping more than 452 million units.

*Apple has a 14.2% share, shipping more than 135 million iPhones.

BlackBerry stock, down 7% since the start of 2013, is trading at a tiny fraction of its all-time high above $140 back in 2008 when the company had a stock market value over $80 billion. Today it's less than $6 billion. (Yahoo! Finance)

The company's in pretty good shape, even with all that

BlackBerry has about $3.1 billion in the bank and minimal debt. This compares to a market cap of $5.3 billion. The whole business is currently valued at only $2.2 billion - just 0.24 times revenues. The company has been aggressively cutting back on expenses. Even with what might look like weak sales, the company won't be plunging into bankruptcy any time soon.

Additionally, the company's:

*Service business could generate $1-$2 in earnings per share on its own, regardless of the hardware business. (CrackBerry)

*Focus on corporate communications is a key advantage, with sophisticated systems that integrate with corporate email, voice PBX and real-time IM from International Business Machines Corp (NYSE:IBM) and Microsoft.

*Intellectual property portfolio - their patents - could be worth around $2.25 billion. (InvestorPlace)

And an update for its operating system and its much-anticipated Z30 smartphone model are due to out soon.

Only one way to go: up

The downside risk for BlackBerry investors seems limited with the stock price looking like it's at rock bottom. The company appears financially stable. When Prem Watsa resigned from the board to avoid "potential conflicts of interest," speculation that Fairfax may try to mount a consortium bid for the Canadian company sent shares up more than 10%. (Fool) They'd jump again when rumor became to reality, and again when buyout offers were made.

You'll want to already be on board for those jumps.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.