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

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

6 Ways 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

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

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!