Blackberry Ltd. (
TSX: T.BB,
Stock Forum) executives met with
Facebook Inc. (
NASDAQ: FB,
Stock Forum) last week to discuss a possible bid for the beleaguered smartphone maker, according to a report in the Wall Street Journal, citing unnamed sources.
It is not clear who broached the idea of a meeting or if Facebook has expressed any interest in Blackberry, which last month signed a deal to go private with
Fairfax Financial Holdings Ltd. (
TSX: T.FFH,
Stock Forum).
Blackberry shares were up 2.6% to $8.77 Tuesday, leaving the company with a market cap of $4.6 billion, based on 524.2 million shares outstanding. The 52-week range is $18.49 and $7.53.
Facebook was up 1.7% to $49.39.
If it was Blackberry officials who offered themselves up for a meeting, they cannot be faulted for trying to get the best possible deal for shareholders.
But published reports in the U.S. have expressed some skepticism about whether talks between the two companies will lead to a deal. 24/7 Wall Street, for example, expressed the view that Facebook CEO Mark Zuckerberg could be risking his relationships with hardware vendors if he saved his best stuff only to run off Blackberry.
“Another issue is that Facebook addicts are already using other smartphones on Android and iOS platforms from
Google Inc. (
NASDAQ: GOOG,
Stock Forum) and
Apple Inc. (
NASDAQ: AAPL, Stock
Forum). They are not the biggest Blackberry customers,’’ the 24/7 report said.
Meanwhile, a class action lawsuit has been launched on behalf of investors who bought Blackberry shares between September 27, 2012 and September 20, 2013.
Law firm
Levi & Korsinsky said in a press release it has filed a complaint in the U.S. District Court for the Southern District of New York. It alleges that the company made materially false and misleading statements, and/or failed to disclose material information regarding the company’s business and operations.
For example, it is alleged that Blackberry failed to disclose that, contrary to company statements that the Blackberry 10 line of smart phones financially strengthened Blackberry and positioned the company for a road to recovery, in fact the company’s business, operations and financial situation was worsened by Blackberry 10 platform.
On September 20, 2013, Blackberry announced that it had incurred a substantial charge due to unsold Blackberry 10 devices, and that the company was forced to lay off approximately 40% of its workforce.
Following this news, shares of Blackberry fell from a close of $10.52 per share on September 19, to a close of $8.73 per share the following day.
None of these allegations have been tested in a court of law, and Blackberry and its officials are assumed to be innocent until such times as they are found to be guilty.