If WhatsApp Is Worth $19 Billion, What Is BlackBerry Worth?

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Whether or not you believe that the $19 billion that Facebook Inc. (NASDAQ: FB) will pay for messaging service WhatsApp is money well spent, there are plenty of reasons to think that the acquisition may pay off for Facebook. You may not agree with those reasons, but even if you own shares in Facebook you don’t really have a say — remember, Mark Zuckerberg still owns more than 50% of the company.

A coattail effect appears to be putting some air under shares of BlackBerry Ltd. (NASDAQ: BBRY) on Thursday morning. BlackBerry, after all, has a messaging service that has been in use for years and is the peg on which superstar CEO John Chen is hanging his hopes for turning around the company. If a service like WhatsApp, which posted revenues of a whopping $20 million last year, is worth $19 billion, BlackBerry has to be worth, well, more than that. Right?

BlackBerry’s market cap currently is just under $5 billion. Virtually all of that is tied to BlackBerry Messenger (BBM), now that the company has pawned off its hardware business to Foxconn. BBM claims more than 80 million active users, a far cry from the 450 million users claimed by WhatsApp, but, hey, we are talking about hopes here, not reality.

In order for BlackBerry to aspire to even a doubling of its market value (to about half the value of WhatsApp!), the company would need to triple its number of active users and it would need to boost its average revenue per user to the stratosphere. The only way that might happen is if BlackBerry sells its BBM unit, but if it does that there will not be anything of value left for the company. Shareholders might not care, but John Chen does, and that is why BBM will stay with BlackBerry for the foreseeable future.

If BBM could be sold, Google Inc. (NASDAQ: GOOG) would be an obvious potential buyers. Google is virtually a direct competitor of Facebook’s, and it has shown that, like Facebook, it is willing to overpay for things. Witness Motorola.

BlackBerry shares popped about 9% after markets closed Wednesday night, but they settled in early Thursday morning with a gain of about 3.5%. The stock trades near $9.33 in a 52-week range of $5.44 to $16.82.