BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) is up for sale, and some big buyers are likely interested. A new report on the company’s stock, from analyst Peter Misek of Jefferies, suggests that the sale of the company is the single most factor in determine its share price. A greying situation for the company, disappointing earnings and poor smartphone sales will not be the defining factor behind the price.
This means that though the Jefferies analysis points to a much worse than expected earnings report in a couple of months, it won’t be the major factor in determining the share price. The report still dropped its price target from $18 to $15, though it rated the stock as a Buy. Shares in the company have shed much of their value since June.
BlackBerry acquisition
BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) is likely to attract many interested parties from the investing community and other mobile hardware makers. Competition for the company could it fetch a higher price, but investors face a problem in valuing the company. BlackBerry is a business difficult to break up into smaller parts.
That leaves those currently holding the shares, and those thinking of buying in, with the same problem. Misek reckons the company is worth sticking with through the acquisition period. At his target price investors could expect a more than 40% bump from today’s price. The reward outweighs the risk according to Misek.
Misek says that weak near term fundamentals won’t be important in deciding the price. Those looking to buy the company are unlikely to keep it working as it is now. They’re going to bring a new strategy to the company. That makes it even more difficult to value.
Shares in the Canadian smartphone company trended down on today’s market dropping 2.7% to $10.26 at time of writing. The company’s shares were trading at close to $14.50 before it delivered its earnings report for the previous quarter. Shares dropped to below $10 in the days after the release and have not recovered much since.
Analysts are trying to figure out what price a buyer is likely to put on the company. With BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) failing, its smartphone wing is becoming less important to investors than its other assets, which include its patent portfolio and its human resources. If those assets are judged worth it, the company could sell for a much higher price.
