BlackBerry sells for $4.7B

[rage2]

Originally posted by littledan
i'm a little confused. So they did a non-cash write down of $1b for unsold inventory of Z10 etc. Does that mean they have $1b retail worth of Z10 sitting around or is that their COGS? what is the purpose of writing that down?

Prepare for a firesale. They wrote down over $1b in Playbook inventory in 2011/2012 and sold 'em for peanuts. The write down is basically a difference in manufacturing cost vs expected value of the inventory.

[Xtrema]

Originally posted by rage2

To be fair, the $1b loss this quarter was due to an inventory writedown on unsold Z10's, so it's not really repeatable. But that sums up BlackBerry over the last years, just have no clue when it comes to the market demand. It's kind of funny that there were shortages when the phone was announced. Wouldn't be surprised if it was an artificial shortage kinda like what Apple does to drum up demand.

I see. Just like MS wrote off $900M of RT tablets.

So it's not a bleak then if they can ditch the hardware business as a go forward plan.

[rage2]

Originally posted by Xtrema
I see. Just like MS wrote off $900M of RT tablets.

So it's not a bleak then if they can ditch the hardware business as a go forward plan.

For the short term, yes. Problem is, that the profit generating businesses will continue to decline, as confidence levels are low, and no new products for upgrades. Several companies and governments have stated that they're in a holding pattern with the BB platform, as they're worried the company will no longer be around in the near future. It's a matter of time before the decision is made from a holding pattern to moving on to greener pastures.

This is why the core services that BB is providing must be sold off to a bigger player, such as say Samsung, to continue to provide hardware to support the whole BB platform on their Android devices. Problem with that is, there's no reason for Samsung to want to do it. It's a lot of work for very little marketshare gain.

My prediction? Buyout happens, hardware gets canned, and cash in as much as possible while the existing customer base defects, and wind everything down as business declines and sell off the patent assets. It'll be good for a solid ROI. That's what I'd do if I had $4.7b to play with.

[2000impreza]

Originally posted by littledan
i'm a little confused. So they did a non-cash write down of $1b for unsold inventory of Z10 etc. Does that mean they have $1b retail worth of Z10 sitting around or is that their COGS? what is the purpose of writing that down?

The $1b is a direct write down to unsold inventory sitting on the balance sheet. Based on blackberry's revenue recognition policy, inventory includes devices at resellers that has not been sold to the customer.

As already mentioned by rage2, expect a fire sale soon. From my past experience with the playbook, I wouldn't even touch these at fire sale prices.

[Sugarphreak]

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[ercchry]

Originally posted by rage2


That's what I'd do if I had $4.7b to play with.

we'll have to start calling you Shelton Gekko

[rage2]

Originally posted by Sugarphreak
I wouldn't mind to get a Q10 if there is a fire sale... no other phone has a good keyboard IMO. But will BBM and BIS continue to be supported

The write down is on the Z10's. Q10's didn't get one AFAIK.

[E36M3]

The one point to keep in mind is that Fairchild owns about 10% of the stock already, so letting the company die would be a huge hit as their cost basis is very high. The terms of the deal could easily be used to be a catalyst for someone else to make a similar/better offer to protect their 10%.

Here is a decent, short article that I found interesting:

http://www.theverge.com/2013/9/23/47...rfax-financial

[interlude]

So what happens to shareholders if Blackberry is pieced out to other companies?

[chkolny541]

Originally posted by interlude
So what happens to shareholders if Blackberry is pieced out to other companies?

Get paid out 9$ a share. And...


» Click image for larger version

[rage2]

Originally posted by E36M3
The one point to keep in mind is that Fairchild owns about 10% of the stock already, so letting the company die would be a huge hit as their cost basis is very high. The terms of the deal could easily be used to be a catalyst for someone else to make a similar/better offer to protect their 10%.

Here is a decent, short article that I found interesting:

http://www.theverge.com/2013/9/23/47...rfax-financial

Fairchild is the Chinese TV channel. You've been living in Chinatown way too long bro.

[ZenOps]

Take the money and run, hooh hooh hooh.

[Akumaz]

Originally posted by chkolny541


Get paid out 9$ a share. And...


» Click image for larger version

if they already signed an intent to purchase BB (waiting on BB to approve the sale), and valued at 9$ per share, why isnt everyone buying at the current price $8.30 (instead of selling)

wouldnt this almost garuntee a profit of 0.7 per share ?

[rage2]

Originally posted by Akumaz
if they already signed an intent to purchase BB (waiting on BB to approve the sale), and valued at 9$ per share, why isnt everyone buying at the current price $8.30 (instead of selling)

wouldnt this almost garuntee a profit of 0.7 per share ?

Because investors don't think it'll go through. BB has already approved the sale. Fairfax is going through the books and auditing everything, and can pull out of the deal without penalty. That's the key, they can pull out of the purchase pretty much whenever they want for whatever reason.

If the sale doesn't go through, the stock is expected to be valued at closer to $5-6.

edit - looks like I was only partially right about the situation. And damn my valuation was spot on with experts haha, based on cash reserves + patent value.

http://www.reuters.com/article/2013/...98M0YI20130925

Jackson said the falling share price showed that investors are dubious that Ontario Teachers' or other Canadian pension funds can be convinced to take part.

The Globe and Mail said Watsa was pitching the acquisition as a leveraged buyout that would be financed with more than $3 billion in bank loans, $1 billion in equity from institutions and Fairfax's nearly 10 percent stake in BlackBerry.

Bernstein analyst Pierre Ferragu said he doubted financial sponsors would be comfortable with $3 billion of debt, given the only collateral BlackBerry could offer is its patent portfolio, which he valued between $800 million and $1.5 billion.

"We believe the Fairfax initiative is unlikely to come to fruition and see the next valuation floor for the stock at $5," he wrote in a note to clients.

[Xtrema]

Originally posted by rage2
If the sale doesn't go through, the stock is expected to be valued at closer to $5-6.

That's how I read it. Nobody will come in with the same or better bid. The vultures are now waiting for Fairfax to fail to raise the capital and come in for the kill.

It's much safer bet @ $5 than $9.

[nzwasp]

So maybe a year until my company ditches using bb for their corporate phones, I can't wait. Unless for some reason we just keep limping on with them. So jealous all my friends have decent phones and I have to use a 2nd hand ex customers phone.

Edit: spikers do you know anything about when we get new phones?

[Perfect Dark]

My company finally started switching over to Android from BB...unfortunately they managed to find a way to fuck that up too and we got Samsung Rugbys (processing power of a potato).

Still better than a Blackberry though, good riddance!

[rage2]

Originally posted by Perfect Dark
My company finally started switching over to Android from BB...unfortunately they managed to find a way to fuck that up too and we got Samsung Rugbys (processing power of a potato).

Still better than a Blackberry though, good riddance!

Damn. You're one of 3 people on my contact list that I'm stuck texting and can't iMessage with haha. My other BB friends all switched to iPhone lol.

[Perfect Dark]

Originally posted by rage2

Damn. You're one of 3 people on my contact list that I'm stuck texting and can't iMessage with haha. My other BB friends all switched to iPhone lol.

Soon enough we'll be able to BBM each other, how's that for progress haha.

[Sugarphreak]

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