BlackBerry (NASDAQ:BBRY) Fails to Shine; Can a Split be an Answer?


It has been a while since we last talked about BlackBerry (NASDAQ:BBRY); the reason is that the company just does not make big news anymore!

The once very successful cell phone manufacturer continues to stay at the bottom of the food chain. BlackBerry (NASDAQ:BBRY) is just not showing the kind of growth that investors want from it nor does it display much promise for the future.

BlackBerry (NASDAQ:BBRY) certainly showed some growth in its previous quarter, but that was not due to its core business. The main reason turned out to be its acquisition of Good Technology. The newly acquired company is expected to add about $160 million GAAP based revenue in the first year. On the quarterly basis, Good Technology will add about $40 million of Revenue.

Apart from this, for third quarter, software sales were down by 13% whereas hardware sales dipped by 15%. With these figures investors may find it difficult to keep their faith in the company.

So how can BlackBerry (NASDAQ:BBRY) turn its fortune around? May be the company management should look at how Jeff Smith is handling things at Yahoo (NASDAQ:YHOO) and ask itself could a split be the answer?

Rumors and suggestions have been around for quite some time. Experts and analysts believe that BlackBerry (NASDAQ:BBRY) would be better off exiting its hardware business for good. The solution to its current crises could be its software and services segment of the business.

BlackBerry (NASDAQ:BBRY) did try its luck with Android operating systems, which was an effort to grab some sort of Android driven smartphone market share. However those efforts have not shown any promising results. A major example is the company’s Priv; the smartphone had a huge price slash within a matter of few weeks form it launch; the prices are down from $379.99 to $299.99. And let’s not even talk about the sales figures of its weirdly shaped Passport device – there are many who still ask why a Passport when your profits and revenues have deserted you?

Chief Executive Officer of the company, John Chen himself has said if BlackBerry failed to introduce a smartphone that could sell units in millions then he would be left with no choice but to axe the hardware business.

Another point of concern for BlackBerry’s (NASDAQ:BBRY) investors is the company’s acquisition strategy. The cell phone manufacturer is buying companies left and right, not only does it put pressure on its capital, but it also makes it difficult to create a smooth network of different operations. In the last few months alone BlackBerry bought 4 smaller companies. Eventually integration of all these new acquisitions may become a difficult task for the management.

A few things will become a little more clear tomorrow June 22nd, when BlackBerry (NASDAQ:BBRY) holds its Special Meeting of Shareholders.

BlackBerry (NASDAQ:BBRY) currently has a market cap of $3.69 with an institutional ownership of about 57%. The stock’s 52-week range falls between $5.96 and $9.63.

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