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

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

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!