Why BlackBerry (BB) Stock Is Jumping Today

Canada-based BlackBerry is advancing nearly 6% today after the company announced that it had closed the sale of its money-losing Cylance cybersecurity unit late yesterday.

The Details of BlackBerry’s Sale of Cylance

BB agreed in December to sell Cylance to IT security start-up Arctic Wolf. Under the deal, BB was slated to receive about $80 million at the close of the transaction and approximately $40 million one year later along with about 5.5 million shares of Arctic Wolf’s stock. There has been speculation that the start-up, which was valued at $4.3 billion in 2021, could launch an IPO this year.

Cylance, which emphasizes using AI to enhance cybersecurity, was expected to generate an EBITDA loss of $51 million for BB during the firm’s current fiscal year.

More Information About BlackBerry

The company has indicated that it’s interested in using the proceeds from the Cylance deal, along with the positive cash flow that it’s now generating, to facilitate repurchases of BB stock.

BB generated adjusted EBITDA of $23 million and operating cash flow of $3 million during its fiscal third quarter that ended in November.

The Recent Price Action of BB Stock

In the last month, the shares have risen 12%, while they have soared 98% in the last three months.

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Disclosure: The author owns shares of BB but has no plans to trade them in the next 48 hours. This article is originally published at Insider Monkey