What's Going on With BlackBerry?

BlackBerry (NASDAQ: BBRY  ) , shares are still trading at a level lower than Fairfax Financial's buyout price of $9.00 per share. Recently, BlackBerry co-founder Mike Lazaridis announced he is exploring a possible joint bid for the company.

Fairfax Financial's offer to BlackBerry is tentative, and BlackBerry has the right to solicit itself to others in the interim. During this "go-shop" process, BlackBerry has the ability to test the waters to see if there are better alternatives to Fairfax Financial's $4.7 billion offer.

Reports are that some companies are interested, but they are much more interested in purchasing pieces of BlackBerry rather than the full company. However, what would potential bidders see in BlackBerry? Also, with other companies only interested in parts of BlackBerry, what are BlackBerry's larger business segments worth?

Finally, what's the hidden risk to BlackBerry's valuation that all investors should be aware of?

In today's segment of Tech Teardown, Quick Minute, Jamal Carnette gives you a quick overview of what all BlackBerry investors should know.

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 12, 2013, at 1:43 PM, derkman wrote:

    You missed out on a few things Jamal. You missed out on the 20-year acquisition of real estate on the books at $ 1.4 billion (has this doubled?). Then you missed out on BBM-X with 70 million members signed up and about to go cross platform, that number would start at $ 1 billion. Then you totally missed out on Enterprise which has been valued as high as $ 5.0 billion, you got patents at a low number of only $ 2.0 billion, then the cash at $ 2.6 billion, and finally close to $ 1.0 billion in tax refunds and cash payments for R & D.

    How did you manage to miss all of this? It was stated that off book obligations would amount to only 15% of the amount stated (because they only have to pay for missed profits and not the phones that aren't delivered) making it a non event. When the dust clears you completely miss-understood the whole analysis. Who put you up to miss-stating everything?

  • Report this Comment On October 12, 2013, at 9:34 PM, k1moops wrote:

    Severe downsizing and hopelessness. Panic and denial have given way to complete withdrawal from the outside world. Waterloo is a dead city because of Blackberry.

  • Report this Comment On October 13, 2013, at 2:54 PM, infektu wrote:

    $5.3bn in purchase obligations ?!?

    For projected hardware sales of $1.5-$2bn that would mean they buy $2.5 of components for every $1 they make in end sales.

    Nobody knows exactly what BlackBerry is worth, but you are certainly among the less accurate, tu put it nicely.

  • Report this Comment On October 13, 2013, at 2:56 PM, infektu wrote:

    k1moops, Jamie boy, InfoThatrHelps...

    What are you going to do once this saga ends, who are you going to bash?

    Will you turn on daddy Apple after sucking up to them for so long :-) ?

  • Report this Comment On October 13, 2013, at 11:05 PM, TMFJCar wrote:

    Thanks guys for reading and commenting!

    @derkman,

    Yes, I stated valuation is inherently subjective.. Canaccord Genuity values BlackBerry at less than my numbers: On a sum-of-the-parts basis, Canaccord Genuity values BlackBerry at $3.75 billion, comprised of $1.25 billion for its enterprise subscriber base, $1.00 billion for net cash and $1.50 billion for its patent portfolio.

    Also, even if they are responsible for only 15% of $5.3 billion, that's almost $800 million--or nearly 1/5th of Fairfax's offer.

    @imfektu

    Yes, $5.3 billion. I'm reporting what others said here--not projecting that figure on my own: http://www.foxbusiness.com/markets/2013/08/16/blackberry-fal...

    I fail to see how reporting a figure is "inaccurate."

    Finally, you don't make purchase obligations on what you DO sell--you make purchase obligations on what you PLAN to sell. They obviously thought they would sell more units. I think anybody that has been following BBRY knows they didn't sell as well as they wanted them to. Not to mention these POs could be from things other than BB10.

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