BlackBerry shares were up nearly 15% yesterday — one of its best-performing days in years — after the elder statesman of Canadian tech offloaded one of its worst-performing assets.
What happened: BlackBerry sold cybersecurity biz Cylance to Arctic Wolf Networks for as much as US$160 million. Even though that’s a fragment of the $1.4 billion BlackBerry paid for Cylance in 2018, it’s seen as a huge W as the company dumps a perennial money-loser.
Catch-up: BlackBerry bought Cylance a few years after it pivoted from phones to software. BlackBerry’s then-CEO called it “a giant step forward toward our goal of being the world’s largest and most trusted AI-cybersecurity company,” which hasn’t quite happened yet.
- Cylance uses AI and machine learning to offer cybersecurity to small and medium businesses, but fell behind competitors like CrowdStrike as the market shifted.
- BlackBerry poured money into Cylance to enhance it, but the bet didn’t pay off. This fiscal year, the unit was on track to lose $50 million.
Why it matters: After shedding this weight, BlackBerry’s future is looking up. This year, it slashed costs on its way to beating revenue estimates in both Q1 and Q2 — putting it in a position to grow the rest of its cybersecurity biz and its promising car software unit.—QH