BlackBerry Ltd Restructuring May Not Add Much To Valuation

BlackBerry continues to restructure, and in the process has now laid off more employees in its smartphone division. However, Colin Stewart, CEO & Portfolio Manager at JV Clark Investments, doesn’t believe that the restructuring efforts will impact the company’s valuation.

BlackBerry Ltd Restructuring May Not Add Much To Valuation

M&A risks follows restructuring

Though there is no information on the number of jobs slashed, a statement by the company on Friday reveals the its intent on consolidating its software, hardware and application business. Stewart said the Canadian company’s success will depend on the number of people using its software and hardware.

Stewart told BNN’s Paul Bagnell, “Anytime you’re in an industry typically characterized by growth and they are constantly reducing costs, it’s not a good sign.” The expert said BlackBerry can effectively increase its earnings and cash flows in the short-term, but the long-term success will depend on its user base and how many people can use their hardware and software.

Stewart, however, refrains from going short on BlackBerry even though all the factors indicate it as a great opportunity. Stewart said that a major problem with some of these turnarounds is the M&A risk. In case the turnaround does not work for the company, there are possibilities that someone could acquire all or a portion of the company, and this could lead to “material appreciation in the stock.”

BlackBerry to allow free BBM voice calls in UAE?

BlackBerry also announced that sometime in the future, it will launch its VoIP based service in the UAE even though such services are banned in the country as of now. Kim van Bokhoven, BlackBerry’s PR Manager for the Middle East, told Emirates 24|7 that they follow the local laws and regulations and are working in close collaboration with their carrier partners in the UAE to offer services such as BBM Voice, Video and BBM Meetings in the future.

With the help of BBM Voice, users can get for free VoIP-based voice calls on the iPhone, Android and Blackberry around the world using data or a Wi-Fi connection. BlackBerry introduced BBM Voice for the first time in 2012 and later expanded it to the iPhone and Android smartphones in February last year.

In the UAE, VoIP-based services from other global providers like WhatsApp, Skype, Viber, etc. are restricted as the country’s Telecommunications Regulatory Authority (TRA) has given the go-ahead only to licensed providers.