BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) patent buyers (potential) are adopting a wait and watch strategy on the company, according to two sector bankers. The potential buyers are seeing if the company will sell its patents, says a report from Forbes by Sarah Cohen.
Financing lowered capital needs for BlackBerry
One of the bankers said that the Canadian smartphone maker would sell its patents if it fails to bring substantial turnaround by 2015 and faces liquidity crunch. The patent sale would mean an influx of cash and increase in the cash reserves for the company. Banker added that the price of $2 billion will appeal the buyer and the seller.
Back in August 2013, BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) formed a special committee to work on strategic alternatives, even considering sale of the company. The patent portfolio of the company was valued somewhere between $5 billion and $200 million depending on the price of similar intellectual property, buyer interest, license growth and the potential for patent infringement suits.
Prem Watsa-led Fairfax financials offered the company $4.7 billion in September last year, but later withdrew the plans and purchased $1 billion in convertibles debt in November, and an additional $250 million last month. According to the banker, the financing lowered the immediate need of the capital, but the company will decide in its meeting, next year, if it wants to sell assets and at what price.
Chen’s success would determine future plans
BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) appointed John Chen as the new CEO on November 4th, who was formerly the CEO of Sybase. The sell decision of the company depends upon the success rate of Chen. If the new CEO brings in the turnaround successfully then the company will not need to sell patents immediately.
“BlackBerry has no plans at this time to sell its entire patent portfolio,” said Lisette Kwong, a spokesperson for BlackBerry. He added that the company has spent many years and millions of dollars in research and development to bring BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) to the topmost position in the QWERTY keypad smartphones, messaging platform and enterprise technology. He said that the company is proud of its patented designs and technology, and will work in the area of innovation and provide intellectual solutions that drive the mobile communications market forward.
“By all appearances, BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB)’s doing what it needs to grow,” said a third banker, “though if the ship’s burning, it will do everything it can to save itself.” Investors, as well as the other smartphone makers, are waiting eagerly to see the report card of Chen.