A Public Company Going Private: BlackBerry & Dell?

Public company going private: BlackBerry Ltd (NASDAQ:BBRY)’s stock plummeted by 17% on Friday and an extra 5.6% today, following the pre-announcement of very weak second-quarter results -including plans to write down almost $1 billion in unsold phone inventory. However, the stock was halted today, at 1:22 p.m. Eastern Time. Surprising most of Wall Street, the company announced a preliminary offer to buy the company at $9 a share from a consortium led by its largest shareholder, Fairfax Financial Holdings. The transaction is valued at approximately $4.7 billion in cash.

In a release from Blackberry, Barbara Stymiest, Chair of the company’s Board of Directors assured that “The Special Committee is seeking the best available outcome for the Company’s constituents, including for shareholders.”

The release states that: “The BlackBerry Board of Directors, acting on the recommendation of a special committee of the board of directors (the “Special Committee”), approved the terms of the LOI [Letter of Intention] under which the consortium, which is seeking financing from BofA Merrill Lynch and BMO Capital Markets, would acquire BlackBerry and take the company private subject to a number of conditions (…) Diligence is expected to be complete by November 4, 2013 (“Diligence Period”). The parties’ intention is to negotiate and execute a definitive transaction agreement by such date. During such period, BlackBerry is permitted to actively solicit, receive, evaluate and potentially enter into negotiations with parties that offer alternative proposals.”

Trading of the stock reopened at 2:00 P.M. EST, and is already on the rise, and getting close to $9 a share. Short-sellers, be aware!

Blackberry Is Not Alone

However, Blackberry is not the only big-tech company going private. Dell Inc. (NASDAQ:DELL)‘s CEO and founder, Michael Dell, has finally been able to take his company private, winning a long-standing battle against activist Carl Icahn. This will allow him to revive Dell Ventures, a segment that is dedicated to investing in startups in some of its core areas, like storage, cloud solutions, big data, software security, and mobility, amongst others.

Michael Dell

While some doubts remain about Dell’s capacity to turn into an IT services and solutions company, a revamped Dell Ventures will definitely help it transform, and drive growth going forward. However, notice that this would be more of a mid-to-long-term solution for the public company going private, which could see its own innovation ameliorate as Dell Ventures’ investments pay off.

Disclosure: Javier Hasse holds no position in any stocks mentioned

Recommended Reading:

BlackBerry Takeover: Who Will Be Targeted Next?

BlackBerry Outlook & A Short Recap

PCMonitor Updates: Is Dell or Samsung at the Top Spot?

Disclosure: none

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!