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BlackBerry ‘likely’ to become a takeover target: report

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WATCH: Blackberry’s QNX system has been called the most secure OS in cars today – Jun 2, 2017

Correction: This article has been edited to reflect the correct value of the sale of Israeli startup Mobileye to Intel: It was worth $15 billion.

Canadians are barely getting used to cheering for BlackBerry (formerly Research in Motion) again, after the company’s stock price soared in recent weeks.

But could Canada lose its technology champion just as it seems poised to make a comeback?

That’s not an unlikely scenario if you listen to one research report that’s recently sent BlackBerry shares on yet another hot streak.

READ MORE: Is BlackBerry back? Why the company’s stock just hit a 4-year high

“When Wall Street shifts its frame of expectations toward the future, and gets over [BlackBerry’s] legacy business, watch out,” wrote U.S.-based Citron Research, which argued the company is ripe for a takeover.
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Indeed, Citron’s case for BlackBerry has nothing to do with KEYone, the firm’s latest smartphone, which debuted in Canada this week to very little fanfare.

What makes BlackBerry a likely buyout target is its secure software for autonomous vehicles, QNX.

READ MORE: 10 things we bet you didn’t know about BlackBerry

“QNX [is] undoubtedly the most secure computer system installed in cars today,” wrote Citron.

The software already runs on over 60 million cars from about 40 automakers — from Ford to BMW — making it a leader in the nascent market.

With Google and Apple racing to build an operating system for self-driving cars and Samsung and Tesla also eyeing that space, BlackBerry looks like an attractive purchase for a number of technology companies with cash to spare, the report argued.

Citron compared the BlackBerry to Mobileye, an Israeli auto startup for which Intel recently shelled out a whopping $15 billion.

Mobileye software at the time had been installed on only 16 million cars, Citron noted.

WATCH: The little device that could – a brief history of the BlackBerry

Click to play video: 'You’ve Got Mail: A history of the BlackBerry' You’ve Got Mail: A history of the BlackBerry
You’ve Got Mail: A history of the BlackBerry – May 31, 2017

The future looks bright

Regardless of whether or not a willing buyer steps forward, BlackBerry’s future looks bright, at least in the near term, according to the report.

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Citron also drew a parallel between BlackBerry and chipmaker Nvidia Corp., whose stock price has ballooned from less than US $50 a year ago to nearly $145.

The stock surge started when “Wall Street stopped valuing NVDA as a graphic chip company and instead looked at its future in autonomous driving.”

Much the same could happen to BlackBerry if investors stop perceiving it as a handset maker and start focusing on its strength as a provider of secure software, wrote Citron.

The research firm expects BlackBerry’s stock value to double in the next two years.

The company has almost completed its transition from handset manufacturer to software maker, after officially ditching its hardware business last fall, noted Citron. It has stopped hemorrhaging cash and recently received a financial shot in the arm from a billion-dollar settlement from technology giant Qualcomm. And CEO John Chen has proved to be a “talented” leader focused on long-term growth, reads the report.

WATCH: BlackBerry opens autonomous vehicle hub

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BIV: BlackBerry opens autonomous vehicle hub – Dec 19, 2016

A string of positive headlines

Citron’s take on BlackBerry is just the latest in a string of positive news that has pumped the company’s stock.

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The firm’s share price started climbing in late March, after it released better-than-expected quarterly results. It continued through April and got a further bump in May, when the global WannaCry malware attack drew renewed investor attention to BlackBerry’s secure software offerings.

The company’s stock price could reach $45 by 2020, according to long-time BlackBerry watcher Gus Papageorgiou of Macquarie Group.

WATCH: BlackBerry rolls out new security platform

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BIV: BlackBerry rolls out new security platform – Dec 9, 2016

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