Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of BlackBerry Ltd (BB -0.69%) popped nearly 30% late Wednesday after Reuters reported Samsung (NASDAQOTH: SSNLF) is mulling a takeover of the beleaguered smartphone maker.
So what: Specifically, the report cites a "person familiar with the matter and documents seen by Reuters" indicating executives from both companies met last week to discuss a potential acquisition. Samsung, for its part, proposed an initial per share price range of $13.35 to $15.49, representing a premium of 38% to 60% over BlackBerry's trading price just prior to the news. The high end of that range would imply an enterprise value of roughly $7.5 billion, according to the documents, assuming conversion of $1.25 billion of convertible debt.
Now what: It's no mystery BlackBerry is struggling to compete in the handset market, having shipped only 2 million smartphones in its most recent quarter. So it's more than likely Samsung is after BlackBerry's market-leading enterprise solutions including BES12, which incidentally stood at the center of a new software partnership the two companies announced almost exactly two months ago.
At the same time -- and however strong Samsung's interest -- such acquisitions are never guaranteed to actually happen. Given that risk, that's why I think BlackBerry investors would be wise to at least consider taking some of their newly won profits off the table.
