TORONTO — Shares of BlackBerry (TSX:BB) continued to slide Monday following last week's massive layoff announcement and financial warning.
The shares were down 43 cents or about five per cent at $8.65 on the Toronto Stock Exchange in early trading.
The move followed a drop of more than 15 per cent on Friday after BlackBerry announced it was cutting 4,500 employees, about 40 per cent of its global workforce.
BlackBerry also said over the weekend that it was hitting pause on the rollout of its popular BlackBerry Messenger service to Android and Apple devices after an unreleased version of the software for Android was posted online.
Customers who have already downloaded BBM for iPhone will be able to continue to use the software, however the unreleased Android app, which caused problems for users, will be disabled.
"Our teams continue to work around the clock to bring BBM to Android and iPhone, but only when it’s ready and we know it will live up to your expectations of BBM," the company said in a post on its blog.
U.S. investment firm Jefferies was among the ones providing downgrading BlackBerry shares, slashing its price target for BlackBerry shares to US$8 from $15 and lowering its rating to "hold" from "buy."
Jefferies analyst Peter Misek says that potential buyers for the company will be price-sensitive due to the shrunken size of BlackBerry's handset business.
He said there's value in the BlackBerry operating system, BlackBerry Messenger services and patents but "the handset business is now an albatross."
On Friday, the company said it plans a a writedown of up to $960 million in the second quarter, primarily from poor sales of its BlackBerry Z10 touchscreen smartphones.
It will also book a $72-million restructuring charge related to changes in its operations, which include previous layoffs.
The company's announcement came a week before the full report is to be issued on Friday.
BlackBerry says it expects to post a loss of US$950 million to $995 million for the fiscal second-quarter. It also projected US$1.6 billion in sales, far short of analyst expectations of about US$3 billion
However, Scotiabank analyst Gus Papageorgiou, who maintained a $13.20 price target on the stock, said the news for BlackBerry isn't as bad as it looked.
"We expect some form of corporate transaction to occur that will benefit shareholders," he wrote in a note to clients.
Papageorgiou noted the job cuts will likely bring the company back to profitability and noted that BlackBerry's services business did better than he expected.
BlackBerry formed a committee earlier this year to consider strategic alternatives, which could include the possible sale of the company.
The review comes after the company's news line of smartphones failed to catch on with consumers.
