BlackBerry Shares Jump, Then Dip, After Samsung Buyout Report
Shares of BlackBerry soared 30% Wednesday before steeply declining in after-hours trading following a report the struggling smartphone maker was approached by Samsung Electronics about a possible acquisition.
The electronics giant recently talked with BlackBerry about a deal worth $7.5 billion, Reuters reports. The report cites documents and people familiar with the matter.
South Korea’s Samsung proposed an initial price range of $13.35 to $15.49 per share, a premium of 38% to 60% over Canada-based BlackBerry’s current trading price, according to Reuters, which cited an anonymous source.
Samsung had no comment.
BlackBerry was more adamant. In a statement, company officials said it “has not engaged in discussions with Samsung with respect to any possible offer to purchase BlackBerry.”
BlackBerry’s denial caused its stock to drop 15% to $10.78 in after-hours trading.
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BlackBerry and Samsung have worked together. In November, BlackBerry announced it would partner with Samsung to bring together its Enterprise technology with Samsung Galaxy smartphones and the device maker’s Knox security platform.
Enterprise is the next key frontier for the tech industry, with giants including Google, Microsoft, Apple and Facebook pushing to woo businesses.
Samsung has made no secret of its intention to conquer the business market for mobile tech, and it has aggressively touted KNOX, its mobile security platform, as part of its grand plan. But the effort is complicated: Samsung devices run on Google’s Android operating system, which has a checkered history with security.
This is where BlackBerry might fit into future plans. BlackBerry’s reputation in security is unassailable. President Obama and other government officials are avowed BlackBerry users for that reason, among others.
Little else has been appealing about BlackBerry in recent years.
Once the front-runner in the smartphone market, BlackBerry has ceded market share to Apple, Google and Samsung. In 2013, Microsoft’s Windows Phone operating system topped BlackBerry for third in smartphone OS market share, behind Google’s Android and Apple’s iOS.
BlackBerry explored and later abandoned plans for a sale of the company in 2013 after its line of BlackBerry 10 mobile devices failed to catch on with consumers. CEO Thorsten Heins was ousted for current chief John Chen. Since then, BlackBerry has shifted its focus toward the enterprise space.
However, the company is still producing smartphones, including the recently launched BlackBerry Classic, which boasts a touchscreen with signature keyboard.
