Blackberry (TSE:BB) (NASDAQ:BBRY) is the second most heavily-traded stock on the TSX Composite Index, after disclosing that it is exploring "strategic alternatives."
The stock is up 10.75% to US$11.13 a share.
The announcement is a capitulation of sorts and comes in earnest amid dogged urging from the likes of activist shareholder Vic Alboini of Jaguar Financial and reports last week that the company may seek to escape from the public eye.
The move paves a new trajectory for chief executive officer Thorsten Heins, who has attempted to take Blackberry through a three-phase transition that was supposed to bring the company back to profitability.
Despite his efforts, the gloomiest of predictions for what was once Canada’s brightest tech darling could lead the company in the same direction as Palm, which emerged as an early leader in smartphone handsets and eventually combusted in the hands of Hewlett-Packard (NYSE: HPQ).
The Waterloo, Ontario-based has formed a committee to investigate the best way to proceed, including a joint venture or an outright sale.
Between either selling itself or going private, stepping away from intense public scrutiny could be a way for Blackberry to shed the negative sentiment that has accumulated and rebuild customer loyalty. Just three years ago, Blackberry had about a 40 per cent market share. Now, it’s less than 10 per cent.
No buyers have emerged at this point, but that hasn’t stopped observers from churning out scenarios. Names like Cisco (NASDAQ:CSCO), Microsoft (NASDAQ:MSFT) and Samsung have come to light.
The board's committee, chaired by Timothy Dattels, will be made up of Barbara Stymiest, Thorsten Heins, Richard Lynch and Bert Nordberg.
Prem Watsa, chairman and CEO of Fairfax Financial, Blackberry's largest shareholder, said he was stepping down from the board "due to potential conflicts that may arise during the process."
On Friday, the stock surged nearly six per cent after a Reuters report said Heins and the board were amenable to taking the smartphone maker private.
Last week, senior executives at private equity firms told Reuters they would participate in a deal to take Blackberry private. The Canada Pension Plan Investment Board also said it would be open to taking part in a Blackberry buyout.
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