Recently, BlackBerry laid off 250 employees, some of which were located in the Research and Development department of the company. During a phase of the company when they should probably be investing more dollars in R&D in order to come up with the next generation of consumer electronics, the company is scaling back. One reason the company may be scaling back is a consequence of being a publicly traded corporation. Public companies are often at the behest of Wall Street to meet quarterly earnings expectations and this short term focus can reduce prioritization of longer-term departments such as R&D. Does this mean being a publicly traded corporation is not in BlackBerry’s best interests?
This is a great quote from Investopedia that sums up why BlackBerry should be investing in Research and Devlopment:
“Healthy levels of capital expenditures and research and development are often critical to the long-term success of a company as it seeks to differentiate its product and service offerings and make its position in the marketplace more competitive.”
I’ll be the first to admit I don’t know all the details of how a publicly traded corporation goes private, but I suspect the biggest hurdle is raising the money to buy out shareholders.
Currently, BBRY stock sits at 8.89 with a market capitalization of $4.58 billion. That doesn’t seem like an impossible amount of money to raise. I’m sure employees alone could make up at least a quarter of that sum. Through investment banks and high net worth investors, the company could raise the money needed.
Once the company is bought back, it would likely alleviate many of the headaches BlackBerry has been facing. A volatile stock price, constant negative press due to Wall Street and analyst reactions and an ability to invest dollars where they’ll help the company be the most competitive.