Just in time for the movie about its dramatic rise and fall, BlackBerry is back in the news.
What happened: Shares for the Waterloo-based elder statesman of Canadian tech jumped 9.32% after announcing it was exploring new ways to drive up shareholder value, which could include splitting up its businesses into separate entities, per The Globe and Mail.
- From Kellogg to GE, spinning off businesses is all the rage for companies looking for a shot in the arm. But as Ernst & Young learned recently, breaking up is hard to do.
But what are BlackBerry’s businesses?
Since BlackBerry stopped making smartphones in 2016 (breaking the hearts of die-hard fans like Premier Doug Ford and Raptors President Masai Ujiri), it has grown four businesses in in-car software, cybersecurity, device management software, and patent licensing.
- None of these are particularly complementary, and out of all of them, the in-car software biz is easily the best performer, delivering near-record revenue last quarter.
- And since selling most of its legacy smartphone patents for up to US$900 million in March, it can no longer sit back and reap the revenue rewards of licensing fees.
Bottom line: Ever since giving up on smartphones, Blackberry has become, per The Globe and Mail’s Sean Silcoff, “a hodgepodge of different businesses” whose share price has “languished for years.” Splitting it up could give it the sense of direction it's lacking.—QH