In Move to Change Company’s Fortunes, Blackberry Considering Going Private

Blackberry Considering Going PrivateWATERLOO, ONTARIO – On Friday, Reuters reported that anonymous sources have hinted that Blackberry (NASDAQ:BBRY) was considering the idea of a selling the company to a private buyer.  Formerly known as Research In Motion, the embattled designer, manufacturer, and marketer of wireless devices and solutions had previously cornered the enterprise mobile market due to the ability to send and receive email.  However, the company has seen its market share and profitability crumble in the face of stiff competition from Apple (NASDAQ:AAPL) and Samsung (OTN:SSNLF).

Following the report, shares rallied 10 percent in pre-market trading on Friday before settling at $ 9.76 by the closing bell, well off the all-time high of $ 230.52, which was reached on June 20, 2007.  The original iPhone was released in the U.S. on June 29, 2007.  The company has pinned hopes of resurgence on the Z10.  However, sales have been weak and less than four months after the device was released major carriers began to offer discounts of as much as 75 percent.

For some time, it has been reported that Silver Lake Partners, one of the private-equity firms fighting to gain control on Dell (NASDAQ:DELL), was considering acquiring Blackberry but at this point an agreement has yet to be reached, and the company continues to bleed cash.

As part of yet another restructuring, the company confirmed on Wednesday that Senior Vice President of Manufacturing Carmine Arabia as well as Vice Presidents Graeme Whittington and Doug Kozak will be leaving the company.  In an email announcing the move, the company thanked them for their contributions and wished them well.

According to a company spokesperson, the moves were part of the second phase in their transformation place to ensure they have the right people in the right roles.  The plan also includes the closure of a testing facility in Waterloo, Ontario; though the company would not reveal how many jobs are expected to be cut during the restructuring.

Whilst the restructuring should not come as a surprise, the announcement, albeit from anonymous sources that the board is considering a sale or taking the company private seemed to catch investors off guard.  However, slow sales of the Z10 are further evidence that the firm has become a minor-play in the multi-billion mobile market.  Ultimately, a private sale, which would allow investors to leverage what value is left in the company’s intellectual property, might be Blackberry’s only hope.

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About the author

Audrey is a senior editor for the business and finance sections.