On Wednesday, Canadian tech firm BlackBerry (BB) unveiled plans to divide its Internet of Things (IoT) and cybersecurity segments. They are eyeing an initial public offering (IPO) for the IoT department in the upcoming fiscal year.
This move follows a trend where businesses are seeking a streamlined corporate model, allowing investors to more accurately assess distinct segments. For instance, earlier this week, the company once known as Kellogg Co. finalized its spinoff. Similarly, healthcare colossus Johnson & Johnson, along with industrial powerhouse General Electric, have previously separated some of their divisions.
Addressing the restructuring, BlackBerry CEO John Chen remarked, "Both the IoT and Cyber sectors are poised to tap into vast and expanding markets. The anticipated structure is set to bolster their efficiency and dedication in offering top-notch solutions."
Waterloo, Ontario's BlackBerry, listed on the US stock exchange, witnessed a 3% surge in its shares during Thursday's pre-market trading. However, the company's stock has seen an 18% dip since an August report by Reuters about a potential purchase bid from private equity entity Veritas Capital.
Earlier in May, BlackBerry had indicated its willingness to contemplate strategic alternatives for its business collection, hinting at a potential division of its units. The company bid adieu to its smartphone venture last year, shifting its focus to offloading legacy patents associated with its mobile gadgets.
BlackBerry's entrance into the public market took place in 1997. The brand rapidly rose to fame in the early 2000s, courtesy of its widely-used business smartphones, which became a staple for professionals, politicians, and enthusiasts alike.
In its recent financial report, BlackBerry disclosed its Q2 results, registering a revenue of $132 million – a decline from the previous year's $168 million. The IoT and cybersecurity divisions reported earnings of $49 million and $79 million, respectively.