Nelson2
6 days ago
Hope we get more clarification on Thursday
“Arctic Wolf will trade 5.5 million shares of its own privately held stock (presumably worth about $40 million), and also pay $80 million in cash at closing, to acquire Cylance. Approximately one year after closing, Arctic Wolf will make a final payment of $40 million.
It's not 100% clear what Arctic Wolf will get in return. BlackBerry notes that it will be keeping its "Secure Communications portfolio of businesses," which are part of the cybersecurity division that generates $378 million in annual revenue. How much revenue BlackBerry loses with Cylance is therefore the big question for investors. If Cylance is still generating $189 million or so annually (as reported in 2021), the valuation of the sale might be 0.8 times sales. If Cylance generates the bulk of BlackBerry's sales today, then the valuation on this sale could be as low as 0.4 times annual sales.
Either way, considering BlackBerry stock itself sells for 2.5x sales, this suggests BlackBerry isn't getting a great price. After the sale, most revenue will come from licensing fees and IoT: about $475 million annually.
GLTA
otterman
6 days ago
I dont think its so outlandish. I first got into this because of a broker report that said $50+ long term.
But yes, a lot had to happen and everything had to go their way, yada, yada, yada...
But the possibility was there.
Ive flipped this twice now and Im up pretty good ATM, but Im finding it harder to sell as time passes. Just sayin.