NEW YORK (TheStreet) -- BlackBerry's (BBRY - Get Report) board refused to allow the smartphone maker to be broken up and sold for parts, Reuters reports. The resistance came despite interest from the industry's top players, including Microsoft (MSFT - Get Report), Apple (AAPL - Get Report), Intel (INTC), Cisco (CSCO) and Qualcomm (QCOM).
The directors of the Waterloo, Ontario-based tech company reportedly rebuffed advances, deciding that a breakup was not in the best interests of shareholders, employees, customers and suppliers.
On Wednesday, former Apple chief John Sculley told Bloomberg he and a group of investors were also interested in bidding on BlackBerry before the company revoked its offer for sale.
Earlier in the week, a $4.7 billion takeover deal with Fairfax Financial Holdings unraveled, leading BlackBerry to abstain from further sales talks with additional interested parties. The smartphone maker now plans to raise $1 billion in convertible debt and will reveal a new turnaround plan under the leadership of interim CEO John Chen.
On the announcement to withdraw from sales talks, Chairperson Barbara Stymiest said in a statement that the company had "pursued the course of action that it concluded is in the best interests of BlackBerry and its constituents".
"This financing provides an immediate cash injection on terms favorable to BlackBerry, enhancing our substantial cash position," she said on the offer of convertible debentures.
In post-market trading Friday, BlackBerry shares gained 0.46% to $6.59, adding to a 0.85% increase during the day.
TheStreet Ratings team rates BlackBerry Ltd as a Sell with a ratings score of D. The team has this to say about its recommendation:
"We rate BlackBerry Ltd (BBRY) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- BLACKBERRY LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, BlackBerry Ltd swung to a loss, reporting -$1.20 a share vs. $2.24 a share in the prior year.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Communications Equipment industry. The net income has significantly decreased by 310.6% when compared to the same quarter one year ago, falling from -$235 million to -$965 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Communications Equipment industry and the overall market, BlackBerry Ltd's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$144.00 million or 133.96% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- In its most recent trading session, BBRY has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. This company's share value has not moved any higher or lower since its value 12 months ago, and we feel the risks associated with investing in this company will outweigh any potential future gains.
- You can view the full analysis from the report here: BBRY Ratings Report