NEW YORK ( TheStreet) -- BlackBerry's (BBRY) sudden and unexpected move on its consumer business makes the deal team at Microsoft (MSFT) appear brilliant for locking down the wireless assets of Nokia (NOK).
The real winner from the end of consumer BlackBerry phones appears to be Microsoft. Apple (AAPL) and Android phones already enjoy the majority of market share that cutting up BlackBerry's consumer segment won't amount to much. Let's take a look at BlackBerry and what investors can expect.
About a month ago I wrote my latest valuation assessment of BlackBerry to temper irrational exuberance. The article was in response to the shares soaring higher on news BlackBerry was looking for a buyer.
Here's the germane takeaway:"As an investor, I wouldn't try to get cute and hold out for everything you can. This is a buyer's market, and every participant knows it. A year ago, BlackBerry was still cash-flow positive and was months away from releasing BB10. That's a whole different landscape than BlackBerry currently finds itself navigating. "After adjusting the balance sheet from a bird's eye view, I think BlackBerry has scrap sale assets near $7.5 billion. Remove $3.6 billion in liabilities and you have a total value near $4 billion. "BlackBerry has 515 million shares, so you take $4 billion divided by 515 million shares, leaves you with $7.75 per share as a starting point. The right buyer may view BlackBerry as a company that can generate profits under his or her management, and that brings us to a buyout valuation above $14 a share." The numbers have changed. If you've been keeping score, about a year ago I placed the scrap value slightly higher than $12 a share and that was before announcing they started bleeding cash. After BlackBerry 10 missed the last holiday shopping season because of endless delays and excuses, and only seconds away from kicking off the busiest shopping season of the year, BlackBerry's CEO Thorsten Heins decides now is the time to pull the plug on smartphones?
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