Wells Fargo gives Market Perform Ratings to BlackBerry Ltd, Nokia Corporation and Apple Inc
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Maynard a Wells Fargo’s analyst says that BlackBerry does not need to privatize itself to cope with its current situation; however it has to come up with different policies to cut down on its expenses. He further says that the Board of Directors of BlackBerry Ltd (NASDAQ:BBRY) doesn’t mind going private.
Market Perform Rating and valuations range of $10.50 – $12 was give to BBRY by Maynard. The analyst believes that Blackberry’s operating expenses are way too high and it needs to consider the option of becoming a relatively smaller company. Maynard believes that by becoming more disciplined about its expenses and considering a cost structure of a smaller company BlackBerry can avoid going private and continue to generate revenues.
BlackBerry Ltd’s last four quarter’s SG&A expenses cost the company 18.8% of its total revenue, whereas Apple Inc. (NASDAQ:AAPL) spent 6.3% and the devices business of Nokia Corporation (ADR) (NYSE:NOK) was at 13.2%.
On average the SG&A spending per quarter for Nokia is $532 million, for Apple Inc it is $2.7 billion and for BlackBerry it is $532 million. Maynard believes that BlackBerry should cut down on its expenses by focusing on its small, but loyal customer base.
According to Amitabh Passt an analyst at UBS, it might be a bit late for BlackBerry to go private because of its disappointing sales, which will not attract that many buyers.
In the current session, shares of BlackBerry Ltd (NASDAQ:BBRY) went up by 7.26% ($9.89). Its trading volume is shares worth $38 million. Shares of Nokia Corporation (ADR) (NYSE:NOK) also went up by 1.18% ($4.19), whereas shares of Apple Inc. (NASDAQ:AAPL) went down by -1.27% ($455.05).