BlackBerry Ltd , traders are jumping on the back of a new rumor on Thursday morning. On Wednesday Cisco Systems Inc. CEO Chuck Robbins said that his firm was going to invest in cyber security. Those with shares in BlackBerry are hoping that means buying into mobile handsets too.
Mr. Robbins made the comments after revealing its earnings for the three months through June. The firm revealed that it earned $0.59 per share, ahead of the $0.56 that Wall Street was looking for. It made sales of $12.8B in the three months, beating Wall Street’s forecast of $12.66B. BlackBerry fans are more concerned about Robbins’ future plans, however.
BlackBerry is enterprise security
The idea that Cisco Systems will seek to buy Blackberry rests on very shaky ground. Mr. Robbins told shareholders that “We think that security is a tremendous play for us, and we will use all of our leverage for innovation to actually build out that architecture.”
The only reason that those with shares in BlackBerry thinks this might apply to them is that the firm operates in an area Cisco Systems wants to break into. Cisco could likely afford to gobble up BlackBerry , in a single bite. The Canadian firm is worth just $4.08B. That doesn’t mean it’s going to happen, however.
There’s lots of other circumstantial support for a deal being put forward on Thursday morning. BlackBerry recently brought Cisco Systems’ Carl Wiese on board to take charge of the firm’s global sales, and there’s a miscellany of deals that the firms have worked together on in the past.
Cisco is a huge firm, and it has left a massive mark on the tech world. You’d be hard pressed to find a major tech firm that doesn’t have deals with it, or employ some of its staff at a high level.
BlackBerry rumors keep building
BlackBerry CEO John Chen says that he’s not ready to sell the firm. He said, in a recent interview with Amanda Lang on CBC, “I don’t have any intention to sell BlackBerry.” He said that the firm could be sold in future when it’s much stronger. If Cisco Systems were to offer a high enough price, the decision might not be in his hands.
BlackBerry is failing. Despite the firm’s real success in lowering its losses, it’s not making enough money for Wall Street. Since the start of 2015 shares have fallen by more than 30 percent of their value.
At their current price, and with the firm’s huge collection of patents and software, it might seem like an ideal buy for Cisco Systems , but we’ve been down that road many times before.
There’s nothing lost in telling a nice story about BlackBerry , , but putting money behind that story is a very different thing. There’s lots of rumors about the firm’s future flying all the time.
Putting money behind John Chen’s firm because Cisco might buy it down the line is likely a bad idea, unless you have access to some kind of info about Mr. Robbins’ plans that the rest of the market does not.