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Paper: Watsa thinking of taking BlackBerry private

  • Sources tell The Globe and Mail Prem Watsa, fresh off resigning from BlackBerry's (BBRY +10.5%) board, is "exploring ways" to take the company private.
  • The paper adds "there was no strategic disagreement" between Watsa and the board, and that his resignation was purely done to avoid conflicts of interest. Watsa's firm, Fairfax Financial, is reportedly "holding talks with a number of private equity and industry players" about a possible deal.
  • Meanwhile, Evercore has upgraded BlackBerry to Hold, and gives the company a $10/share sum-of-the-parts valuation. The firm thinks a buyer could see value in BlackBerry's network operations centers, and end up better monetizing them by creating an "open solution" that supports Android/iOS (as the departed Jim Balsillie reportedly wanted).
  • Jefferies' Peter Misek once more takes an optimistic view, assigning a $15/share LBO valuation.
  • More on BlackBerry
Comments (18)
  • wheelz23
    , contributor
    Comments (48) | Send Message
     
    Why didn't they consider the sum of parts/LBO valuation when they slapped a 6/share price target on it?

     

    I still can't figure out if analysts are just stupid or if they're trying to manipulate the price.
    12 Aug 2013, 06:12 PM Reply Like
  • samzas
    , contributor
    Comments (8) | Send Message
     
    with 3 Billion in cash...a deal less than 9 Billion will not happen...I dont see a deal happening at less than $18 per share.. this will linger on.. the saga will continue.. we will even see the chinese make an offer..who knows..?

     

    with the recent news of samsung getting BBM for africa that gives some clues that they might even want to jump in with a buyout or possibly a strategic partnership

     

    it is going to be a wild circus till december...

     

    JAN 2014 TARGET $22
    12 Aug 2013, 06:43 PM Reply Like
  • TheBigPayback
    , contributor
    Comments (130) | Send Message
     
    What this does is to set the clock ticking: any interested party knows that as time passes, BlackBerry's value decreases and the potential for another party to make a move increases .

     

    I think we'll see a major announcement in the next 30 days or any subsequent announcement will be underwhelming.

     

    Tick tock, tick tock: BlackBerry has too many rich assets for someone not to make a play for the long game...
    12 Aug 2013, 07:25 PM Reply Like
  • NBohrQM
    , contributor
    Comments (52) | Send Message
     
    RING, RING, RING. IMO...they would never announce this unless they already a game plan in place. We'll hear something soon.
    13 Aug 2013, 03:42 AM Reply Like
  • Scal80
    , contributor
    Comments (40) | Send Message
     
    I really hope this ends up being a partnership announcement and not a buyout which screws over the long investors who have been riding this rollercoaster.
    12 Aug 2013, 07:49 PM Reply Like
  • Drew Easrtmond
    , contributor
    Comments (49) | Send Message
     
    This stock has gone wild with speculation. They haven't confirmed anything. Just a committee looking "MAINLY" into strategic partnerships.

     

    Now the stock is all of a sudden worth more now that it could be bought out. I don't invest in companies with short term prospects. I want to see a vision, and It's time to lighten my shares and diversify.

     

    Maybe Nokia :P ( I always liked that stock )
    12 Aug 2013, 07:49 PM Reply Like
  • LYogi
    , contributor
    Comments (1946) | Send Message
     
    don't let the door hit you on the way out.
    12 Aug 2013, 08:47 PM Reply Like
  • alext1379
    , contributor
    Comments (697) | Send Message
     
    Rogers in Canada is offering $49 Lumia 900s and $199 Q10s. As beat up as BB is, it can still command a premium and not literrally burn through its cash like Nokia who have only just started evaluating their cost controls. Being #3 or #4 doesn't really matter if your business plan results in greater red ink the more marketshare you claim.

     

    Only Samsung, backed by hidden government money can afford to lose money on everything they sell because their reason for being is beating the Japanese at whatever the Japanese are doing, no matter how much it costs the government because they have a huge inferiority complex.
    12 Aug 2013, 11:19 PM Reply Like
  • ATInsider
    , contributor
    Comments (421) | Send Message
     
    I agree with samzas.
    No way BBRY will be purchased for anything less than 9B.

     

    I would also rather have a strong multi-year strategic partnership with BBRY gaining unlimited liquidity to increase BB10 hardware sales and increase the aggressiveness of BES10 adoption. In return they the lucky partner shares in profits.

     

    IMO.
    12 Aug 2013, 08:46 PM Reply Like
  • Spectator88
    , contributor
    Comments (6) | Send Message
     
    Blackberry is without a doubt the most painful investing experience of my life. Now many are talking "take under" which means I'm really under. At least it will put me out of my misery.
    12 Aug 2013, 09:29 PM Reply Like
  • I'llBuyThatForADollar
    , contributor
    Comments (9) | Send Message
     
    BBRY's short interest continues to steadily decrease over the last month.

     

    http://bit.ly/XjR8ao
    12 Aug 2013, 10:42 PM Reply Like
  • alext1379
    , contributor
    Comments (697) | Send Message
     
    An LBO still requires voter approval and if over 50% of shares are owned by the little guy, then the bid still has to be reasonable. With the way premiums are tossed around, it seems there's always a 30% premium to the 200 day average or something close to that.

     

    A low ball offer will get rejected and BB loses marketshare and makes the planned turn around strategy even more difficult with market manipulators killing the stock every 3 months.
    If Watsa thinks he can get shares to $40, then offering something around $18/share won't cost him much if he'll just IPO for $40. Or he can risk dragging this on longer by saving a few $ per share short term. Watsa doesn't seem to be short term gain kind of guy, the big investors think in years, not quarters.
    12 Aug 2013, 11:24 PM Reply Like
  • LYogi
    , contributor
    Comments (1946) | Send Message
     
    Let's hope.
    12 Aug 2013, 11:37 PM Reply Like
  • domi1kenobi
    , contributor
    Comments (71) | Send Message
     
    You guys are not realistic... 40$ would mean 4x5 billion..
    PW may consider himself lucky if he finds 5 billion.
    13 Aug 2013, 08:51 AM Reply Like
  • MPF94025
    , contributor
    Comments (511) | Send Message
     
    When all is considered over the past two years, do not see how PW could have sat by while the rest of the BOD and TH slowly killed the company. As someone who is long BBRY, and and BBRY investor who has sat tight over the last few months, not a BBRY hater, this is my perspective.

     

    I suspect after considering both successes and gaffes over the past 6 mos +, he must have felt no option but to take matters into his own hands. There is no reason the company could not have worked out "alliances" with him remaining on the BOD. This could only have happened if he felt disappointment with the overall team esp others on BOD, TH, and others in leadership, ie a lack of confidence they had the skills to right the ship. I think this was becoming a personal embarrassment for him. The rapid support he has gathered from others (esp after reading so many comments there was no chance anyone in Canada would come to the rescue) regarding taking the company private also speak to the lack of confidence by others in the current BOD and TH: there is no reason all of these individuals/pensions/etc could not have simply invested further at the current share price if they had confidence in the current BOD and TH.

     

    The fact that so many others have been reported to be fleeing the company also speaks to a lack of confidence with current leadership.

     

    Alicia Keys, flying carpets, BB Link, miserable communication regarding capabilities of new devices (strengths and weaknesses), disgruntled RIM users trying to upgrade but hitting a brick wall with migration of contacts, calendars, sync, etc, QE report from TH while in a coma, too much for anyone with lots of $$ on the table to tolerate any longer, esp with the "just give us more time" mantra.

     

    Perhaps a wild opinion, but this seems the clearest and fastest route to an injection of capital, a revamp of the BOD, and a new CEO, with PW having an even stronger say in management. I hope it comes with $$, and as a requisite a shakeup in many leadership areas, esp CEO, to give the new BBRY a chance to survive. The devices are worth it and the new software, while unpolished, offers features iOS can only hope to offer, with security Android users can scoff at now, but sooner or later will pay a price as hackers go for easy targets.

     

    Don't know what was going on in the boardroom, but if PW really believed in the current team he could have just increased his stake in the company. What he wants is a shakeup ASAP.
    13 Aug 2013, 12:27 AM Reply Like
  • Truth_Investor
    , contributor
    Comments (302) | Send Message
     
    I think the solution is investors need to have thicker skin, and see the future potential of this stock. If going private stops short trading, I'm all for it. But I do believe that BBRY can rebound without going private. First they need to make sure potential consumers have the ability to test-drive their BB10. I went to 5 stores, and not one of them had a working model of the Z10, only 2 of the 5 had a working model of the Q10. Blackberry needs an endcap, or kiosk in Best Buy. Verizon no longer displays the Z10 (might have something to do with the Apple contract). I would like to hear more about their new marketing efforts. You can sell a new device, with a new OS if no one can try it before they buy it.
    13 Aug 2013, 03:42 AM Reply Like
  • Scal80
    , contributor
    Comments (40) | Send Message
     
    The problem is carriers have to meet quotas for competitor phones like the iPhone or they are heavily penalized, hence the lack of promotion for BBRY.

     

    Verizon seen owing Apple up to $14 billion:
    http://bloom.bg/12vdx08
    13 Aug 2013, 04:21 AM Reply Like
  • Frank Siedler
    , contributor
    Comments (838) | Send Message
     
    Prem Watsa shout buy the main stake of BlackBerry, so that the waves could calm down a little!
    13 Aug 2013, 07:49 AM Reply Like
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