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Blackberry speculation follow Nokia deal

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Blackberry speculation follow Nokia deal

Earlier in the week technology giant Microsoft (NASDAQ:MSFT) announced it would be paying $7.2 billion in cash to its partner Nokia (NYSE:NOK) for the company’s mobile handset segment. Included in the deal were a number of key patents and technological data, previously unavailable to Microsoft. Consequently, shares of Nokia soared as the street attempted to revalue the infusion of capital. Moreover, the street was sent looking for a number of other, similar, technology plays. BlackBerry (NASDAQ:BBRY) , which has performed especially poor as of late, caught a bid following the Nokia announcement. Since the start of the week, shares have moved to the upside by nearly 10% to $11 per share. While BlackBerry has lost the majority of its relevance over the last few years, the company still holds a number of key assets.

Within the company’s balance sheet we see a monumental hoard of assets including $5.48 in cash per share. In the same regard, the company holds an impressive number of patents related to the mobile and technology space. Using conventional book value valuations, we see Blackberry trades at a large discount to its competition at only 0.59 times book.

The street is being logical in its speculation according to some analysts. Just last month it was announced by management there was a possibility of a private equity buyout in the near future. BlackBerry stated it planned to form a special committee to seek out alternatives for its business. In the statement, Tim Dattels, chairman of the committee stated “Given the importance and strength of our technology, and the evolving industry and competitive landscape, we believe that now is the right time to explore strategic alternatives,”. While exuberance may fill the trading floor today, don’t count on a deal coming, or closing, anytime soon. A private equity buyout of such a magnitude would most certainly take some time to swallow. In the meantime, we wish good luck to the traders following the stock.

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