Analyst: BlackBerry could burn through $2B in cash over next 6 quarters

BlackBerry (NASDAQ:BBRY) is working on a $4.7 billion deal to go private, but being shielded from the scrutiny of public shareholders will not change how much cash the company is likely to burn through as it executes its turnaround. According to one analyst's estimate, the company is likely to burn through most of its $2.6 billion in cash in the next 18 months. Bernstein Research analyst Pierre Ferragu figures that BlackBerry will spend around $2 billion during that period. "Because the company is losing users at a very high pace, has a stretched working capital and massive off-balance-sheet commitments that will turn into cash burn in the next four quarters, we believe BlackBerry is likely to burn close to $2 billion in the next six quarters on a standalone basis," Ferragu wrote in a note to clients, in which he downgraded the company's stock, according to AllThingsD. According to the Wall Street Journal, Canaccord Genuity analysts only value the company's net cash at $1 billion because of expected further inventory write-downs, future restructuring costs and significant contractual commitments. BlackBerry said in a recent regulatory filing that its various financial resources, including  future cash, cost cuts, available credit, potential financing deals and a tax refund, should give leave it with "necessary financial capacity for the foreseeable future." Article (sub. req.)

Sponsored by ADI

What if we were always connected? With the help of our advanced wireless technology, even people in the most remote places could always be in touch.

What if there were no ocean, desert, mountain or event that could ever keep us from telling our stories, sharing discoveries or asking for help? ADI’s next-gen communications technology could keep all of us connected.

Suggested Articles

Verizon EVP and CTO Kyle Malady shared a few details about how it's using the 3.5 GHz Citizens Broadband Radio Service (CBRS) band.

Ericsson's latest Mobility report finds that an average of 64% of service providers globally offer fixed wireless access (FWA) service.

The U.K. on Monday set out a roadmap for removing Huawei equipment from 5G networks and outlined a new strategy to diversify the supply chain.