Blackberry’s Recent Downslide May Force The Company To Go Private

By: Talha Bhatti  |   August 14th, 2013   |   Business, News, O Canada, Smartphones

A big announcement came in this Monday, when senior representatives of Blackberry told sources that the multimillion dollar Canadian company is looking to go private. This came just before the stock markets opened in the United States and has caused much speculation amongst investors. Blackberry once owned a large share of the smart phone market. It almost formed a monopoly and its products were a must have for everyone who desired slick and stylish mobile phones for business use. But since the emergence of new Android and iOS smart phones, Blackberry has fought hard to hold tight to what little proportion of the market it still has left. Selling of the company is plan that comes as no surprise to many.

 

The company issued a statement emphasizing the need to look for alternate strategies which the representatives believe are to the best of interest for the company. Blackberry has taken a toll since the arrival of its rivals, namely Samsung and the new Apple products. People have tended to shift to these smart phones and hence have taken a large part of the phone market.

 

The decision came after the company has gone off the rails lately and has lost a large sum of money in the past year, mostly to its rivals. Economic value of the company has also taken a downslide since the past 5 years. Blackberry had a mammoth value of more than 80 billion dollars in 2008 which has now decreased to 5 billion, an incomparable and a staggering loss in overall worth.
BlackBerry is considering going private, several sources familiar with the situation told Reuters.

 

Reuters says that chief executive officer Thorsten Heins and BlackBerry’s board of directors are, “increasingly coming around to the idea that taking BlackBerry private would give them breathing room to fix its problems out of the public eye.” The news outlet goes on to state that, “No deal is imminent, however, and BlackBerry has not launched any kind of a sale process, the sources said. Even if it tried, BlackBerry could find it hard to come up with a buyer and the funding to go private. With the company still posting losses and bleeding subscribers, private equity firms and other buyers may not want to step up. The Waterloo-based smartphone pioneer’s market value sits below $5 billion, down from $84 billion in 2008. Shares are down 20% this year, despite the launch of BlackBerry 10.”

Source: TechVibes