Boston, MA 10/15/2013 (wallstreetpr) – Networking technology leader Cisco Systems, Inc. (NASDAQ:CSCO) is in plans to buy ailing Canada-based handset and software maker BlackBerry Limited (NASDAQ:BBRY).
Cisco has all the reasons to smile as it has been posting impressive performances on multiple fronts including its share prices, business worth and market share. Despite stiff competition, it remains the undisputed leader of the networking technology industry, an industry currently valued at $50 billion globally.
BlackBerry’s stocks recently tumbled massively as its quarterly sales plummeted by as much as 45%, forcing its board to rethink its strategy and toy with the idea to sell off. Cisco’s shares, on the other hand, have been impressing investors and industry experts alike.
Cisco’s acquisition spree over the last decade saw it acquire about 140 companies. This seems to have paid off as the networking giant has posted more net profits than losses despite tremendous market competition. Cisco’s shares have given strong net gains – signs of good growth – even though its prices have occasionally vacillated for short periods.
Experts feel that the networking major will be unfazed and would actually benefit strategically if it acquires BlackBerry since Cisco’s current market value is well over $125 billion with a cash balance of about $50 billion in the bank. BlackBerry’s net worth that it brings to the table could well be over $6 billion, with the BlackBerry IP portfolio worth about $3 billion, its hardware section considered being about $2 billion and the widely popular BlackBerry Instant Messenger expected to generate $1 billion in initial revenues.
Although profitable, Cisco revealed plans in August to axe 4,000 jobs to cut costs and realign its strategy to growth areas, probably indicating further intentions to expand and dominate the networking and Internet technology sectors. John Chambers, Cisco’s CEO since 1995, justified the move citing reasons of a challenging global economic climate.
Cisco’s fortunes have seen a rise with earnings at $2.27 billion in 4Q2012 while revenue rose 6 percent to $12.42 billion, surpassing analysts’ forecast of $12.41 billion in revenue.
As on October 14, Cisco’s stocks posted a modest gain of 0.06 to close at $23.34 from its previous $23.28.
