BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) announced on Monday that it wouldn’t go through with a sale after all, and the company’s shares tanked as a result. So what’s ahead for the company? Baird analysts say now that the offer from Fairfax has failed, BlackBerry is worth even less than it was before. However, they think potential suitors may continue circling the struggling company.

BlackBerry

BlackBerry moves to salvage mode

BlackBerry’s board has been looking for strategic alternatives for months, and Monday was the deadline for Fairfax Financial to solidify its go-private offer for the company. However, the firm apparently wasn’t able to line up the financing needed to get the deal done. Instead, BlackBerry is replacing its chairman and CEO and trying to raise $1 billion in converts.

Baird analysts Mark McKechnie and Zachary Amsel suggest that there may still be some buyers interested in BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB), although their interest comes with a lower offer as well. They estimate that if potential suitors remain, they might offer less than $7 a share for the company now that Fairfax’s offer has failed.

What’s BlackBerry worth now?

They lowered their price target for BlackBerry to $6.50 per share after adjusting their sum of the parts analysis in light of the failed privatization bidding round. They’re including $3 per share or $1.6 billion in net cash by the end of the 2015 fiscal year, plus $1.90 per share or $1 billion for patents and $1.55 per share or $810 million for BlackBerry’s services business.

The analysts are also assuming BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) will burn through $550 million in cash flow during the second half of 2014 and $430 million during the 2015 fiscal year.

Salvaging BlackBerry

In determining what could be done with BlackBerry, they continue to see the company’s services business as “the most interesting opportunity.” They still argue that BlackBerry’s installed base of 70 million recurring services customers could be saved if the company cuts ties with its non-consumer handsets and focuses just on opening up the BlackBerry Enterprise Services platform to iOS and Android. They believe BlackBerry “could have a long tail as die-hards with advanced or specialized security needs” keep the company in business.

The analysts were previously estimating that BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB)’s services business was worth $970 million. They’re new $810 million valuation puts a multiple of eight times on their $100 million terminal estimate in annual net income for the group. They based their net income estimate on 30 million subscribers with a $2.50 monthly average revenue per user for $900 million in annual revenues at around 15% operating margins and 25% taxes.

BlackBerry is now a “special situation”

It’s likely BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) will remain under pressure without some kind of outside buyer or major strategic change. The Baird analysts see a number of possible endings for the company, including a situation like PALM in which shares fall even lower before the company was ultimately taken out. Another possibility could be that the company tries to go it alone for “a long period” and eventually reaches the right size for the “legacy” BlackBerry opportunity.

The analysts said there’s “an outside chance” that BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) turn things around by opening up BlackBerry Enterprise Server to Android and iOS. They also said any combination of the first three could happen as well.