BlackBerry has a comeback plan
According to a recent report from Reuters, Canadian technology firm BlackBerry has announced plans to undertake a comprehensive assessment of its strategic options. This review will explore the potential separation of one or more of its businesses, among other possibilities.
Following the announcement of its strategic review, BlackBerry's shares surged by nearly 11% during after-hours trading in the US. Established in 1984 and known for its pioneering work in pagers, the Canadian firm has clarified that it has not established a specific timeline for the assessment and will refrain from disclosing updates related to the process, unless there is board approval for a particular agreement or if the review has concluded.
BlackBerry made its debut on the public market in 1997 and quickly gained widespread recognition for its widely-used business smartphones, which were popular among high-level executives, political figures, and a loyal following of enthusiasts in the early 2000s. However, the company ceased production of these devices last year and has since been actively seeking buyers for its legacy patents pertaining to mobile technology.
In addition to its strategic review, BlackBerry also confirmed that it will proceed with its existing plan to sell its patents to Malikie Innovations Limited, as was previously announced. The deal, which is valued at up to $900 million, was initially intended to be finalized with Catapult IP Innovations Inc for $600 million. However, the latter agreement fell through due to an unusually extended closing process.
"BlackBerry is executing on a strong, well-resourced plan to deliver revenue and ARR growth, as well as significant improvements in non-GAAP EPS and cashflow this fiscal year. Although we expect achievement of this plan to deliver significant shareholder benefits, we do not believe that this is fully reflected in the market's current valuation of the Company," stated John Chen, Executive Chairman & CEO.
"Accordingly, the Board and management believe it is an appropriate time to initiate a comprehensive review of the Company's portfolio. The review aims to identify and evaluate opportunities to further enhance shareholder value. As we undertake this review, we remain fully focused on delivering our plan and remain committed to our customers, partners and employees,” he added.
Malkie is a newly-established subsidiary of Key Patent Innovations Ltd., a company specializing in intellectual property monetization.
What happened to BlackBerry?
BlackBerry, a once-revered mobile technology giant, lost its grip on the industry due to a combination of factors. One of the key reasons was the company's inability to keep pace with the rapidly-evolving smartphone market. While BlackBerry initially dominated the market with its innovative business-oriented devices, it failed to adapt to the rise of touchscreen smartphones and the increasing consumer demand for mobile apps.
Additionally, the company's management was criticized for its lack of foresight and inability to execute effective strategies, leading to a decline in its market share and financial performance. Ultimately, these factors culminated in BlackBerry's downfall as a leading player in the mobile technology space. Now the company transitioned to focus on its core offerings in the areas of cybersecurity and software solutions for automakers.Advertisement