BlackBerry (BBRY) is circling the drain. And a breakup of the Canada smartphone company now seems inevitable.
BlackBerry stock is down more than 40% year-to-date in 2013 and down over 60% from its February peak. First, it was the poor reception of the company’s last-ditch relaunch of BlackBerry smartphones via the Z10 and Q10 devices to start the year. And more recently, BBRY is down sharply on news that the $9 per share BlackBerry buyout proposed by Prem Watsa of Fairfax Financial Holdings has fallen apart.
BBRY is basically dead in the eyes of many investors. But the stubborn company continues to deny this fact, even now contending that it will be able avoid a breakup.
A few weeks back, the smartphone manufacturer embarked on a PR campaign to reassure customers and investors as BlackBerry stock struggled against the negativity. And a more recent Reuters report details how the very idea of a breakup was unacceptable to BBRY management.
Apparently the company thought it was going to forge a deal with Microsoft (MSFT), Apple (AAPL) or Lenovo (LNVGY) … but while all three companies expressed mild interest, none of them wanted the entire disaster of BBRY — just a few specific parts.
But the fact that a deal hasn’t happened yet — and that the company recently fired CEO Thorsten Heins, who had been with BlackBerry’s executive team since 2007 and presided over the failed launch of the Z10 and Q10 — shows that reality is starting to set in.
BBRY will not be broken up and sold for parts, since there clearly are no interested buyers for the whole company and because each passing day makes BlackBerry stock less and less attractive.
The only question is whether this smartphone company can deal part of its operations fast enough to salvage something of a business, or whether the end result for what is left of BlackBerry stock will wind up in bankruptcy court.
More on BBRY
- Heins out as CEO after BlackBerry buyout deal falls apart. (USA Today)
- Why the Fairfax Financial bid failed. (The Slant)
- Want to profit from the BlackBerry collapse? Try options. (Barron’s)
Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. Write him at email@example.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.