Ahead of the Bell: BlackBerry

NEW YORK (AP) -- A Citi analyst on Wednesday assumed coverage of BlackBerry Ltd. with a "Sell" rating, saying that the smartphone maker continues to struggle and is worth more broken into pieces than as a whole company.

Ehud Gelblum, who also set a $4 price target, said that the company current management doesn't currently seem interested in breaking up the company.

"While it remains unclear just where new management intends to focus its resources — something we should learn more about on next week's earnings call — we are dubious as to which aspects of the handset business, software or hardware, Blackberry could successfully compete in," Gelblum wrote in a note to investors.

Gelblum added that just shutting the company down would also be expensive for shareholders, with shutdown separation and costs potentially approaching $1 billion. Purchase commitments would add another $2.9 billion. Combined, those costs would exceed the company's cash balance of $2.6 billion and recent $1 billion investment, he said.

The BlackBerry, pioneered in 1999, had been the dominant smartphone for on-the-go business people and other consumers before Apple debuted the iPhone in 2007 and showed that phones can handle much more than email and phone calls. In the years since, BlackBerry Ltd. been hammered by competition from the iPhone as well as Android-based rivals.

In January, the company unveiled new phones running a revamped operating system called BlackBerry 10 designed to better compete but the phones did not sell well.

In premarket trading, BlackBerry shares fell 7 cents, or 1.2 percent, to $5.90 about a half hour before the market opening.