Samsung was rumored to potentially be interested in buying out Blackberry earlier this year for an estimated $7.5 Billion, which resulted in a temporary increase in stock price valuation of Blackberry. Blackberry of course quickly shot down the rumors to try and defuse any sort of allegations about the buyout, as did Samsung after Blackberry’s response, stating that Samsung had not made an offer nor were they in talks about a potential acquisition. This led to Blackberry’s stock eventually falling back to the valuation that it was at before the rumors had been reported. Now, the Securities and Exchange Commission and the Ontario Securities Commission are asking questions about the news and whether or not the rumor was deliberately leaked for the purpose of causing the stock prices to rise.
At the moment all the details concerning the investigation haven’t been made public, but it calls into question whether or not Reuters, who was responsible for the report and was cited as seeing documents about the alleged acquisition proposal, is being investigated. At the moment it seems the investigation is limited to asking questions about the report and whether or not it was put out with the intention of manipulating Blackberry’s stock prices. According to The Wall Street Journal a spokesperson for Reuters parent company(Thompson Reuters Corp.)was not available to comment on the matter.
It’s no surprise that Blackberry has been having a tough time in the market for a number of years due to rising popularity from competitors responsible for the Android and iOS mobile platforms. A public report discussing the potential sale of a company to a large competitor, or any company for that matter tends to cause a hike in stock valuation, which would open up the opportunity for some people to make some pretty serious cash off stock sales. It’s precisely this scenario that seems to be driving the SEC and the OSC to ask questions about the whole situation, especially when you consider the percentage at which the Blackberry stock had increased prior to and during the release of the original report by Reuters, which was at an increase of 4% before, and 30%during/after the report went public. At this point in time it seems to be nothing more than a light investigation, but you can be sure we’ll keep you posted on the matter if anything else comes to light.