Tomahawk, WI 8/11/2013 (Basicsmedia) – BlackBerry Ltd (NASDAQ:BBRY) is well known for designing, manufacturing and marketing wireless solutions to every corner of this world. This is a North American company which has its headquarters in Waterloo, Canada from whence it has been operating ever since it was founded in 1984. It changed its name to BlackBerry Limited in July 2013, though in the past years, it used to be known as Research in Motion Limited. The main question on everyone’s lips is why the company wants to go private.

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Image shows BBRY) market share.

Image is from www.winbeta.org

Why Should BBRY Go Private?

Companies often have unique situations they have to go through which eventually may force them to go private. However, one of the major benefits of making such a move is that it ends up freeing the company to pursue its interests in full since it is spared from the numerous regulatory and reporting requirements which others have to put up with. Secondly, the company will see an improvement in financial gains which its shareholders and company executives enjoy. A company of BlackBerry’s repute has probably taken a deeper examination of what is required for this.

It can only be hoped that the company seeks to put more focus on its business, and is unwilling to fall behind its competitors in the attempt to control this huge market. BlackBerry will surely see more growth as a market leader should these plans bear fruit and the company goes private successfully. It is much easier for a private company to enjoy better success in many fields compared to one which is publicly quoted, like BlackBerry has been doing at NasdaqGS. BBRY will enjoy holding periods of up to 8 years, thus freeing it from meeting quarterly financial goals.

Why is BBRY Going Private?

BlackBerry has been reporting not-so-good financial results of late. It is an open secret that its shares have taken a thorough beating, hence the need to look for private investors to come on board. The reason why the company’s shares have taken this type of beating is because very few of its new smartphones have been sold, quite unlike what it was expecting. Analysts have been taken aback by the poor performance of BlackBerry new types of smartphones in the market. Currently, it is third behind both Apple’s iPhone as well as devices operated using Google’s Android system.

BlackBerry is reported to be worth around $5 billion, while some conservative estimates have placed its cash flow alone at around $3 billion. Therefore, it is not in a really bad place except for the fact that its shares have been facing a horrid time in the stock market. As to whether the decision to go private would see an upturn in its stock prices, and general profitability as a company, thereby making it attractive once more before its shareholders and investors, I think this is something we will wait and see. If the move goes through, shareholders and CEOs will benefit.

What I would say about this issue is that the company is stable. It doesn’t suffer from cash flow problems. It’s financially healthy, though not to the standards which would be expected of a company of its stature.

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