Jim Armitage: Blackberry deal - lifeline is nothing more than ugly break-up
Jim Armitage is the City editor of The Independent and London Evening Standard group of newspapers. He has been a reporter and editor for more than 20 years and was recently shortlisted for the Press Gazette financial journalist of the year and The Society of Editors financial journalist of the year awards. He contributes news, investigative reports and comment to the Independent titles plus a daily column in the Evening Standard.
Tuesday 24 September 2013
After two years of rapidly worsening misery, capped with one of the most sensational profit warnings in recent corporate history last week, Blackberry shareholders have been thrown a lifeline. Albeit one that’s frayed to a thread and covered in a noxious mould.
Stuck in a market of fast-forward Darwinian evolution, the implosion of their company has been one of the most extraordinary since, well… Nokia’s. But now, one shareholder, Fairfax, reckons it can reverse the survival of the fittest paradigm. Despite the vast muscle of Samsung, the design flair of Apple, the financial strength of the Huaweis and HTCs snapping up minority market shares, Fairfax thinks Blackberry can become a contender once more. The executive’s mobile of choice.
Huh? They must be living in some parallel universe, where the sickest thrive, the weak inherit the earth. For Blackberry is surely lurching, zombie-like, towards the mobile graveyard, hobbling there at an even quicker pace than Nokia. At least the Finns are selling 50 million handsets a month. About 3 million of Blackberry’s new Z10s are currently said to be gathering dust unsold as draught excluders.
Last week’s trading statement made it clear. As Enders analyst Benedict Evans points out, this is not a decent business that’s been hiding inside bad executive decisions (although buying a corporate jet in July was clearly not bright planning). Inside that death shroud of bad management, there is, in truth, no business left at all.
What Fairfax will have, however, is a bunch of patents with some value (Google valued Motorola’s at about $5.5bn), and the installed software in thousands of businesses who retain Blackberry for secure corporate email. Who knows – someone might pay good money for such a customer base.
Add that to a cash pile of a couple of billion dollars and you’re probably getting pretty near the $4.7bn Fairfax is offering.
In other words, this is most likely to end up being a break-up bid and nothing more. Others may come in with rival offers, but the price will be similar. Shareholders will grab this lifeline as the alternative is to drown altogether in the longer run.
- 1 Rape threats, death threats and a police investigation after video poking fun at an Islamic Party in Malaysia goes viral
- 2 Katie Hopkins attacked me on Twitter — so I reported her to the police for inciting racial hatred
- 3 Gamers confess the worst things they've done in The Sims
- 4 6-year-old writes ice cold Valentine's card to his stepmother
- 5 Syrian child photographed 'surrendering to camera because she thought it was a gun'
Rape threats, death threats and a police investigation after video poking fun at an Islamic Party in Malaysia goes viral
Why Robin Williams safeguarded himself against a morbid trend in advertising
Jeremy Clarkson 'could be given minder' ahead of a potential Top Gear return
6-year-old writes ice cold Valentine's card to his stepmother
Jeremy Clarkson to become 'special adviser on transport' to David Cameron
Katie Hopkins attacked me on Twitter — so I reported her to the police for inciting racial hatred
Street preacher quoting from the Bible fined for calling homosexuality an 'abomination'
Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
David Cameron calls Labour 'hopeless, sneering socialists' while announcing 7-day NHS plans
Revealed: Putin's army of pro-Kremlin bloggers
Katie Hopkins reported to the police for race hatred by Labour MP Simon Danczuk after tweet about Pakistani men
iJobs Money & Business
£20000 per annum + commission: SThree: Sthree have an exciting opportunity for...
£18000 - £32000 per annum: Recruitment Genius: A Telesales Executive is requir...
£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...
£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...