Blackberry has come to an agreement with a major shareholder Fairfax takeover. Fairfax is willing to count. $ 9 per share in cash Blackberry down This is converted down to some 4.7 billion dollars in total.
At present, Fairfax already about 10% of the shares owned Blackberry. With a price of under $ 8 seems to be a simple one-two punch to achieve this. At first glance a nice return However, I think it is not that simple.
It’s no secret that it is not a long time well with Blackberry. Last month, the manufacturer announced a disappointing outlook and announced thousands of jobs to delete in order to reduce costs.
radically Not a pretty picture
Fairfax and its advisers and lawyers still the due diligence do Blackberry and that is expected to be not a pretty picture. The company reported earlier that the fact still alone in the second quarter of this year took a $ 1 billion loss on his behalf because of a huge write-down of inventories of his once vaunted Z10 smartphones.
The product seems just totally not sell. Fairfax also shows his own money in order yet to be given. Indeed, it is still seeking funding for the deal with Bank of America, Merrill Lynch and BMO Capital Markets.
The question is whether banks but these amounts (ie $ 4.7 billion) to lend to a party that a washed-up phone manufacturer wants to take over
.
sidetracked
Blackberry Is indeed a washed-up phone manufacturer then? Yes. I think so. There is still a lot of cash available and in addition they want us to believe that the hardware division also is still worth something.
Just for comparison: Apple sold nine million units of iPhone 5S in the first three days after its introduction, Blackbbery sold about one-third of this number in three months
.
Blackberry says it expects the due diligence will be completed on November 4 and will work on a definitive merger agreement at that time. That leaves about 4 to 5 weeks for the members of the consortium takeover to change your mind or to bring that they do not come around itself with financing.
outIt is therefore a risky bet at this stage, and certainly no quick way to make money on the possible takeover.
easy money
At the time of publishing Duijvestijn has no positions in the share Blackberry. He may have other positions where not written.
Selwyn Duijvestijn is an active stock market trader and assesses underlying values ??through a unique method of sale dignity and potential return. On BeursBazaar.com investors can subscribe to his free newsletter full of opportunities and pitfalls noted in several markets. For questions, please send an email to info@beursbazaar.com.
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other hand, the Canades W. Buffett behind Fairfax, within BBY be ensured that there is reasonable alignment of interests is the CEO of BBY, he was able to achieve an acquisition. If that helps, who knows :)
I do not wonder what the blackberry hardware is worth, but including their automotive platform called QNX, their apps like blackberry messenger, their patents, etc. See also Nokia, While bumping their hardware, but then there is value in the company. In BBRY is even more difficult to calculate. I’m not saying that there is more value than Selwyn says, I just do not know. And I suspect not. Selwyn himself
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