TORONTO: BlackBerry will consider selling itself after the long-awaited debut of its new phones failed to turn around the struggling smartphone maker.
The company said Monday that its board has formed a special committee to explore “strategic alternatives” in hopes of enhancing the company’s value and boosting adoption of its BlackBerry 10 platform.
The company said its options could also include joint ventures, partnerships, or other moves.
The Canadian company’s U.S.-traded stock closed up 10.5 percent to $10.78 on Monday.
The BlackBerry, pioneered in 1999, had been the dominant smartphone for business people and other consumers before Apple debuted the iPhone in 2007 and showed that phones can handle much more than email and phone calls. In the years since, BlackBerry Ltd. has since been hammered by competition from the iPhone as well as Android-based rivals. In January, the company unveiled new phones running a revamped operating system called BlackBerry 10 designed to better compete. But its market share continues to lag, and the company warned in June of future losses.
Mike Walkley, an analyst with Canaccord Genuity, said sales are getting worse even with price reductions for the new phones.
“Now they have to go to the next step of what’s best for the company and shareholders to survive long term because it doesn’t look promising on BlackBerry 10 sales,” Walkley said.
Monday’s announcement marks the second time BlackBerry has said it has hired bankers to help weigh its options since Thorsten Heins became CEO in early 2012. The company had faced numerous delays modernizing its operating system with the BlackBerry 10. During that time, it had to cut more than 5,000 jobs, and shareholder wealth declined by more than $70 billion.
Heins had said then he was not actively looking to sell BlackBerry, but wanted to be prepared given the challenging environment. He ended up focusing on launching BlackBerry 10 this year, but the company warned in June of future losses.
Analysts on Monday began guessing who might want to buy BlackBerry.
“If they can get it done, they should absolutely do it. If [BlackBerry has] a future, it would be better to do out of the public eye,” said BGC Financial analyst Colin Gillis.
Given that director Prem Watsa, the company’s largest investor with a 9.9 percent stake, is resigning from BlackBerry’s board “due to potential conflicts that may arise during the process,” some picked him as a possible bidder.
Watsa has said that he believes BlackBerry can turn itself around, but that it might take three to five years. He’s the founder of insurance company Fairfax Financial Holdings Ltd. and is one of Canada’s best-known investors. “I continue to be a strong supporter of the company, the board and management as they move forward during this process, and Fairfax Financial has no current intention of selling its shares,” Watsa said in a statement issued by BlackBerry.