Yet another bad report on BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB). Citi analysts have downgraded the company’s shares to Sell on concerns that a shutdown would use up all of the company’s cash.

BlackBerry

Citi sets $4 TP for BlackBerry

In his latest report, Citi analyst Ehud Gelblum picked up coverage from Jim Suva, who had previously been following BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB). In assuming coverage from Suva, Gelblum also downgraded the company’s shares from Neutral to Sell and lowered Citi’s price target from $7 to $4 a share.

He sees the most value in BlackBerry as coming from breaking up the business. However, management doesn’t seem to want to do this. He also said that shutting down BlackBerry probably wouldn’t add any value because the costs of separation and purchase commitments could end up being more than the amount of cash the company has on its balance sheet.  The analyst doesn’t see “any clear-cut strategy” which would help BlackBerry get itself “out of the strategic box it finds itself in.” In fact, he says that without a “longshot turnaround and commercialization” of the popular BBM messaging app, he doesn’t see very many options for BlackBerry Ld (NASDAQ:BBRY) (TSE:BB).

Does any part of BlackBerry have any value?

Gelblum does say that if it turns out that any of BlackBerry’s parts have some value, including the company’s cash or patents, then his Sell rating would be at risk. While most other analysts have suggested that BlackBerry Messenger carries the largest potential for revenue for the company, Gelblum notes that it’s mostly a non-revenue generator at this point. However, he said it’s possible that BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) or a potential suitor could monetize that app’s user base, which could then value BBM as a social network like Facebook Inc (NASDAQ:FB), WhatsApp, or other messaging service like it. He sees the possibility of this happening as low though.

In terms of patents, BlackBerry has about 7,300 of them. He notes that valuing them is tricky and says he doesn’t think they’re worth “anywhere near as much as Motorola Mobility’s were,” which Google paid $5.5 billion to buy 17,000 patents. He said even using that metric, which he doesn’t agree with, BlackBerry’s patents would be worth about $2.4 billion.