This well-known Canadian tech stock is likely to use its strong balance sheets to make acquisitions. It has a history of successfully absorbing new businesses to expand its earnings. And the favourable settlement of its dispute with Qualcomm will add over $900 million US to the company’s assets.
BLACKBERRY LTD. (Toronto symbol BB; www.blackberry.com) has now won its licensing dispute with computer chip maker Qualcomm Inc. (Nasdaq symbol QCOM). BlackBerry accused Qualcomm of overcharging for use of its patents. The two firms later agreed to settle the case through binding arbitration.
As a result of the decision in its favour, BlackBerry has now received $940 million U.S. That’s separate from the $1.4 billion U.S. in cash it held on February 28, 2017. Moreover, long-term debt for the company was just $591.0 million U.S.
The company has quit developing new smartphones as part of its plan to focus on its more-promising communications software operations.
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Growth stocks: Long-term licensing deal for India, Nepal and Bangladesh
Under that new plan, BlackBerry has opened a facility in Ottawa to develop new technologies for self-driving cars using its QNX software system. Over 60 million vehicles now use QNX to power their in-car information/entertainment systems.
However, the development of self-driving cars is a rapidly growing field, and BlackBerry faces strong competition from much larger firms such as Waymo, Google’s self-driving car unit.
In March, BlackBerry signed a new long-term licensing deal with Optiemus Infracom Ltd. That firm will design, make and sell BlackBerry smartphones for India, Nepal and Bangladesh. The deal could generate about $28 million U.S. a year for the company.
Recommendation in The Successful Investor: BlackBerry is still a hold.
For our recent report on a Canadian growth stock in the tech industry that we rate as a buy, read Canadian tech leader primed for more acquisitions.
For our views on making the most of rising growth stocks, read How to find up and coming stocks for your portfolio.
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