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BlackBerry Buyout: A Big Waste of Time and Money

BlackBerry (BBRY) stock rallied at Monday’s open on yet another report of a buyout plan, spearheaded by Canadian investor Prem Watsa — with the backing from pension funds — for a bid for the embattled tech stock.

It’s all well and good to be patriotic and hope your home-grown smartphone stock remains a player in the marketplace, Prem … but don’t be naive. A BlackBerry buyout — particularly one that is designed to turn around BBRY instead of selling the company for parts — is an ill-advised venture doomed for failure.

You see, BlackBerry isn’t plagued by shareholders or the fact that it’s a publicly traded stock. If anything, BBRY investors have been remarkably patient with CEO Thorstein Heins and with the so-called reinvention of the company this year, which has seen the Z10 and Q10 lines flop … hard.

BlackBerry is forecasting another loss for the current quarter, and analysts expect red for BBRY’s full fiscal year — and if the company continues to miss expectations, it could find itself bleeding cash well into fiscal 2015, too.

The reason is that BBRY has fallen behind — both in brand appeal as the Apple (AAPL) iPhone and smartphones powered by Google (GOOG) Android have caught on with consumers, as well as in the innovation race.

Consider that BlackBerry CEO Heins called tablets like the iPad nothing more than short-lived fads. And he said this just a few months ago!

Consider that BlackBerry considered its Q10 a no-brainer hit because it’s one of the few keyboard-equipped smartphones out there … but initial reports indicate anemic demand. So much for a slam dunk!

Consider the BlackBerry Z10 debut flopped hard, resulting in a surprise quarterly loss.

Do all these events sound like something that’s the fault of a fickle shareholder base or undue scrutiny from analysts? No. These are the problems of a company with a poor strategy in a digital age.

And a BlackBerry buyout spearheaded by Watsa won’t change that.

BBRY is still doomed, either as a private stock or as a private enterprise.

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Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. Write him at editor@investorplace.com or follow him on Twitter via @JeffReevesIP. As of this writing, he did not own a position in any of the stocks named here.

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