BlackBerry Breakup Likely With Few Suitors Remaining

BlackBerry might be an easy target these days, but it’s hard to blame the industry watchers smelling blood in the water surrounding the once-great smartphone manufacturer.

The latest is Canaccord Genuity analyst Michael Walkley, who, following Fairfax Financial’s decision to retract its bid for the company, thinks BlackBerry as a whole won’t be attractive to any potential suitor.

The Q10 and its cousin, the Z10, weren't enough to help BlackBerry stay competitive this year.Following very disappointing August quarter results, our Oct./Nov. handset sales survey work indicated very weak sales trends with falling BlackBerry 10 prices and continued high levels of inventory,” said Walkley. ”Following the unsuccessful funding of Fairfax Financials $9/share bid, we believe a sale of BlackBerry is no longer imminent and few if any candidates remain to purchase the company in its entirety.”

BlackBerry introduced its BB10 operating system to carriers at the end of last year, getting positive reviews from the wireless companies. It was enough to double the company’s stock price and breathe some life into the company. But the new Z10 and Q10 smartphones weren’t big sellers, particularly in developed markets such as North America and Western Europe. The stock price steadily declined and then fell further when Fairfax decided not to pursue its bid of $9 per share. As of midday Friday, it had fallen to $6.50, a price you would’ve expected to see in 2003.

Apple and a bevy of Android manufacturers with massive user-friendly app stores left BlackBerry behind as the smartphone revolution took off a few years ago. The company has fallen farther and farther behind ever since.

While we maintain our belief BlackBerry will ultimately end up selling the company due to the difficult competitive smartphone market and low probability BlackBerry 10 can return BlackBerry to sustained profitability, we now believe a breakup is more likely than an outright sale and fundamentals will continue to deteriorate over a now longer public sale process under new management,” Walkley added.

Walkley reiterated his HOLD rating for BlackBerry stock and a $6 target price.

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