BlackBerry shares fall back as Lenovo hype fizzles

Shares of BlackBerry (BBRY), known until recently as Research In Motion, fell nearly 3% Tuesday, giving back some of gains from Monday driven by speculation that Lenovo (LNVGY) might buy the beleaguered Canadian company.

Wall Street analysts were skeptical that the Canadian government, which blocked Australia's BHP Billiton's (BHP) $39 billion bid for Potash of Saskatchewan (POT), would allow a Chinese company to take over BlackBerry. Indeed, Lenovo executives appeared to be backing away from suggestions from Lenovo's CEO, Yang Yuanqing, that it might consider such a move.

As Morningstar analyst Brian Colello told Reuters: "My understanding is that Canada treats the company and its patents as a bit of a crown jewel and would not rule lightly on a takeover."

The appeal of BlackBerry to Lenovo is understandable. Though the company was the only PC maker to show growth in the fourth quarter in Europe, Africa, and the Middle East, Lenovo needs to find a way to offset the erosion in the PC market, and BlackBerry still has plenty of fans in the corporate world, as Bloomberg Businessweek notes.

Commentator Ashraf Eassa, though, makes a compelling argument on Seeking Alpha that Lenovo would have difficulty buying BlackBerry, whose market cap is is about $7.52 billion, given that the Chinese company has a market value of about $11 billion and $4.48 billion in cash and cash equivalents. 

BlackBerry's future, though, isn't entirely bleak. AT&T (T) recently announced it will start to sell the new Z10 touchscreen later this month. The device has received some positive reviews though some pundits still wonder whether the company's best days are behind it.

--Jonathan Berr does not own shares of the listed stocks.  Follow him on Twitter @jdberr.

More on moneyNOW

• Why you're paying so much for college
  

• Maybe the real problem at 'Today' is Matt Lauer

• 10 of the worst product flops ever