BlackBerry (NYSE:BB) shares are ticking higher in the pre-market session today after the technology company announced plans to spin off its cybersecurity and IoT businesses into two independently operated entities.
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This development comes after the company and its advisors, Morgan Stanley and Perella Weinberg Partners, conducted a review of its portfolio of businesses. After evaluating a range of strategic alternatives, including separating businesses and potential sale structures, the company has decided to separate the two units in a bid to enhance shareholder value.
Next, BlackBerry will pursue an initial public offering of its IoT unit, with a target launch in the first half of the next fiscal year. John Chen, the Executive Chair and CEO of BlackBerry, commented, “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 shares have plummeted nearly 23% over the past month. Last week, the company’s second-quarter top line dipped by 21%, but earnings improved over the prior year.
Is BB a Good Investment?
Overall, the Street has a consensus price target of $5 for BlackBerry, along with a Hold consensus rating. This implies a 17.1% potential upside in the stock.
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