Outside of the meme stock rally we saw in 2021, BlackBerry (NYSE:BB) has been a relatively steady stock, at least over the past year. Shares of BB stock have generally traded within a relatively narrow band, with investors seemingly having little reason to re-think the cybersecurity and Internet of Things (IoT) player’s valuation (outside of shifting macro forces, of course).
That said, a big announcement made earlier today may be such a catalyst for investors to consider. BlackBerry announced that John Giamatteo will be appointed as its CEO, replacing interim CEO Richard Lynch. Additionally, the company highlighted plans to split up its IoT and cybersecurity businesses into standalone divisions, breaking up the company’s existing corporate structure.
These moves appear to be aimed at improving BlackBerry’s efficiencies and centralizing functions across its business units. With so many peers highlighting efficiency and cost-saving efforts, BlackBerry appears to be falling in line. Additionally, the company’s goals of enhancing shareholder value via a new corporate structure may be enticing to some investors, though today’s price action doesn’t indicate much in this regard. BB stock is down just a little below 1%.
Let’s dive into what to make of this news and whether BB stock is worth a look right now.
BB Stock Flat on CEO/Corporate Structure Change Announcement
For many long-term investors, BlackBerry could be one of the most frustrating stocks to have ever owned. The former smartphone maker surged in value prior to the Great Recession before absolutely plummeting over the better part of the past two decades.
Now a cybersecurity and IoT player focused on making software and infotainment systems for various automakers, BlackBerry’s business model has completely shifted. Indeed, this corporate structure move appears to be the latest in a series of such moves as BlackBerry looks to find a structure that can maximize shareholder value.
It’s clear that IoT and cybersecurity are the two segments BlackBerry wants to focus on. Splitting out these divisions and centralizing many of the back-end support functions for these groups are perhaps the right strategic direction investors need to see. I’ll keep BB stock on my watch list and provide updates on how this shift progresses.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
