October 4, 2023 BlackBerry has made it official: It plans to split the Canadian company in half.
In a news release Wednesday, the company said its board has decided that separating the IoT and Cybersecurity business units into two independently-operated entities “is the optimal strategic direction for BlackBerry.”
The company signaled its intention in May, saying the board was reviewing the cybersecurity company’s portfolio of businesses, including the possibility of a split. In August, there was a report that Veritas Capital was talking to the company about a buyout.
Examination of what to do with the company’s assets has been dubbed Project Imperium. It will continue looking at other parts of the company.
“The chief objective of the separation is to pursue a subsidiary initial public offering for the IoT business, the market leader for high-performance, safety-critical foundational software in automotive and other verticals, with a launch targeted in the first half of the next fiscal year,” the company said today.
“BlackBerry believes that a separately traded IoT subsidiary will enable shareholders to more clearly evaluate the performance and future potential of BlackBerry’s principal businesses on a standalone basis, while allowing each business to pursue its own distinct strategy and capital allocation policy.”
In a statement, CEO John Chen said the board and management believe that separating the principal businesses will improve BlackBerry’s ability to create value for all stakeholders. “Both the IoT and Cyber businesses have leading technology and talent and address large and growing market opportunities. This new proposed structure will further increase both their operational agility and ability to focus on delivering exceptional solutions to their customers.”
BlackBerry’s stock has ranged from US$3.17 to $5.75 in the past 12 months. It leapt after the May 1 announcement. On Sept. 15, it was US$5.51, then dropped to US$4.35 on Tuesday. On Sept. 28, BlackBerry released its latest quarterly results showing a non-GAAP operating loss of US$28 million and GAAP operating loss of US$47 million. GAAP stands for generally accepted accounting principles.
The stock rose 21 cents in after-hours trading following the announcement.
The Motley Fool, a financial website, said in August that BlackBerry’s cybersecurity revenue “has shriveled year over year for four consecutive quarters, and its IoT revenue declined sequentially and year over year in the latest quarter.”
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