Canadian technology company BlackBerry revealed on Wednesday its plans to divide its business units into separate entities, focusing on Internet of Things (IoT) and cybersecurity, aiming for a subsidiary initial public offering (IPO) for the IoT division in the upcoming fiscal year.
In the latest quarterly report, BlackBerry disclosed total revenue of $132 million, a decline from $168 million reported in the same period the previous year. IoT revenue was reported at $49 million, while cybersecurity revenue stood at $79 million.
The planned segregation of business units aligns with BlackBerry’s strategic vision, positioning them to optimize their focus and operational efficiency in the burgeoning markets of IoT and cybersecurity. The proposed IPO for the IoT subsidiary is set to attract market attention, marking an exciting development in BlackBerry’s evolution, Reuters news report said.
This strategic move aligns BlackBerry with a growing trend among companies, seeking to optimize their corporate structure to enhance investor assessment of their distinct business components.
John Chen, CEO of BlackBerry, emphasized the potential of both the IoT and Cyber businesses, citing their significant and expanding market prospects. The proposed separation is anticipated to bolster operational flexibility and enable a dedicated focus on providing top-notch solutions to customers.
Following this announcement, U.S.-listed shares of BlackBerry, headquartered in Waterloo, Ontario, surged by more than 4 percent during after-hours trading. This surge follows a decline of over 18 percent in the company’s shares since reports emerged in August regarding a buyout offer from private equity firm Veritas Capital.
In May, BlackBerry had communicated its intent to explore strategic options for its diverse business portfolio, including potential separation of specific businesses. The decision to exit the smartphone industry was made last year, with the company subsequently endeavoring to divest its mobile device-related legacy patents.