BlackBerry announced on Monday that it will sell nearly all of its legacy patents related to mobile devices, messaging, and wireless networking to a special purpose company, Catapult IP Innovations for $600 million.
In premarket trading, BlackBerry stock was down nearly 5% to $7.46, then it was up 1.4 percent to $7.98 early in the regular session. Year to date, shares are down 15.7 percent, while the S&P 500 is down 7%.
BlackBerry, a Canadian cybersecurity firm, will be paid $450 million in cash and $150 million in a promissory note when the deal of selling mobile and messaging patents is completed, which could take up to seven months. According to the firm, antitrust regulators in both Canada and the United States must approve the deal.
Read more: How BlackBerry, the phone everyone once wanted to own, got disconnected
Catapult, based in Delaware, has obtained a conditional commitment of $400 million from Toronto-based funding provider Third Eye Capital to acquire BlackBerry’s IP assets.
BlackBerry’s third-quarter sales was $183 million, down from $218 million in the same period the previous year but higher than expert projections of $170.9 million. The cybersecurity division brought about $128 million in revenue.
According to FactSet, the company will disclose fourth-quarter profits on March 31.
Blackberry joins Nokia, Kodak, Jawbone, Xerox, Ericsson and Seiko, among others, in raising cash by taking advantage of their patent portfolio after their tangible product businesses lost market share.
