BlackBerry Shares Jump 30 Percent on Potential Takeover
Reports suggest that Samsung could purchase the smart-phone company for $7.5 billion.
Shares of BlackBerry, the pioneering maker of the smart phone that has fallen on hard times with the popularity of Apple's iPhone, soared 30 percent on Wednesday after reports surfaced that Samsung was interested in purchasing the company for $7.5 billion.
By the closing bell, Blackberry shares had risen $2.89 apiece to $12.60 and the company's market capitalization was just shy of $6.6 billion.
According to Reuters, which cited an unnamed person familiar with negotiations, Samsung approached BlackBerry with a price of as much as $15.49 a share, which would represent a 60 percent premium to where the shares traded on Tuesday.
Shares of BlackBerry rose nearly 50 percent in 2014 in the midst of the company's turnaround, though the stock remains far off a 2008 high of about $147.
During the after-hours session, though, BlackBerry shares were plunging 12 percent in response to a statement the company issued late Wednesday that said, in part: "BlackBerry has not engaged in discussions with Samsung with respect to any possible offer to purchase BlackBerry."
Many on Wall Street, nevertheless, view BlackBerry as a takeover target.
On Wednesday, Bloomberg noted that BlackBerry is a Canadian company and that it's not a slam dunk that regulators there would approve its takeover by a foreign company (Samsung is based in South Korea).
BlackBerry continues to sell devices with physical keyboards and also has introduced others with a touch-screen keyboard similar to those pioneered by Apple. In the first three quarters of its fiscal year, BlackBerry recorded revenue of $2.7 billion, down from $5.8 billion a year earlier though its loss was just $332 million compared to a loss $5.5 billion.
Jan. 14, 2:40 p.m. This story was updated to include BlackBerry's response and after-hours stock movement.