BlackBerry shares were set to open 3% lower on Monday after it warned of a huge quarterly loss and at least 15 brokerages slashed their price targets.
The only question was whether the company would be sold in one piece or in parts, analysts said.
BlackBerry said on Friday it expected to report a net operating loss of almost $1 billion in the quarter ended Aug. 31, largely due to writedowns on a mountain of unsold BB10 phones.
Brokerage National Bank Financial, which believes that any recovery is very unlikely for BlackBerry, cut its price target to $5 from $8, valuing the company at about $2.6 billion. That would be a far cry from its 2008 peak of $80 billion when BlackBerry was the major player in corporate email and Apple Inc was just launching its iPhone.
BlackBerry's US-listed shares, which fell 17% on Friday and have nearly halved in value since February, were trading at $8.23 pre-market.
In a note titled "Train has wrecked, what now?" analysts at Evercore Partners said BlackBerry would be worth more if its software businesses were split from its declining hardware business.
The company has been losing market share as smartphones powered by software made by Apple and Google Inc started dominating the market.
Apple said on Monday it had sold about 9 million iPhone 5s and iPhone 5c models in the first three days since their launch, with demand exceeding initial supplies.
BlackBerry said on Friday it sold about 3.7 million phones in the latest quarter, most of them its older models. BlackBerry's BB10 phones, based on a new operating platform, were billed as marking the turnaround in the company's fortunes but it has failed to gain market share.
"Given the failed BB10 launches, our view is the most likely outcome is a take-over for BB," CIBC analysts said in a note. Adding to its woes, the company postponed a weekend launch of an Android and iPhone app for its BlackBerry Messenger. Analysts say the delay further erodes customer confidence in the company.
BlackBerry has previously said it was considering a sale of the company, and analysts had put the value of its parts -messaging business, patents, cash and investments - at $8 billion to $10 billion, double its current market value.
Nomura analyst Stuart Jeffrey believes the weakness in the company's performance is going to make it harder for BlackBerry to sell itself. He cut his target on the stock to $9 from $10. While BlackBerry has hired advisers to look for a buyer, analysts debated whether Canada's one-time hi-tech champion is more valuable if sold piecemeal to competitors or private investors.
"We believe BBRY needs to act quickly and decisively in coming to a conclusion with regard to any potential sale of the company and should look to sell assets to bolster its cash position," Wells Fargo analysts said.
However, Baird Equity Research analysts preferred to be contrarian, upgrading the stock to "neutral" from "underperform."
"The stock is now more likely to be driven by M&A rumors and sum-of-the-parts arguments," it argued in a note.