backtop


Print 17 comment(s) - last by ritualm.. on Nov 5 at 7:30 PM

John S. Chen -- chairman, CEO and president of Sybase, an independent software vendor -- will take over as BlackBerry's Interim CEO

Many awaited BlackBerry's big buyout news today, but it turns out that the company will receive a hefty investment instead -- and this new plan entails the removal of BlackBerry's current CEO.

A BlackBerry press release revealed that the company is ditching previous buyout plans and will instead receive $1 billion in funding from Fairfax Financial Holdings Limited and other institutional investors.

"Today's announcement represents a significant vote of confidence in BlackBerry and its future by this group of preeminent, long-term investors," said Barbara Stymiest, Chair of BlackBerry's Board. "The BlackBerry Board conducted a thorough review of strategic alternatives and pursued the course of action that it concluded is in the best interests of BlackBerry and its constituents, including its shareholders. This financing provides an immediate cash injection on terms favorable to BlackBerry, enhancing our substantial cash position. Some of the most important customers in the world rely on BlackBerry and we are implementing the changes necessary to strengthen the company and ensure we remain a strong and innovative partner for their needs."

Back in September, Fairfax Financial planned to pay $4.7 billion in a BlackBerry buyout, and today was the deadline for that deal after a due diligence period. The deal was to ensure that BlackBerry goes private and that each shareholder receives $9 per share in cash. 

However, it looks like that $4.7 billion buyout won't be happening today. BlackBerry and Fairfax Financial must have found a new solution during the due diligence period, and now, BlackBerry's going to take the funding and try to right its wrongs. 

But that $1 billion investment won't come without a few conditions. One of the major changes is that BlackBerry's current CEO Thorsten Heins will be stepping down once the deal is completed. John S. Chen -- chairman, CEO and president of Sybase, an independent software vendor -- will take over as BlackBerry's Interim CEO until a permanent replacement is found. 


BlackBerry CEO Thorsten Heins

"I am pleased to join a company with as much potential as BlackBerry," said Chen. "BlackBerry is an iconic brand with enormous potential - but it's going to take time, discipline and tough decisions to reclaim our success. I look forward to leading BlackBerry in its turnaround and business model transformation for the benefit of all of its constituencies, including its customers, shareholders and employees."

There will also be some other executive shifts, such as Chen being appointed to Executive Chair of BlackBerry's Board of Directors (in addition to Interim CEO) and Prem Watsa, Chairman and CEO of Fairfax, being appointed to Lead Director and Chair of the Compensation, Nomination and Governance Committee. 

David Kerr (on BlackBerry's Board of Directors) will resign from the Board at the closing of the transaction along with Heins. 

BlackBerry is a sinking ship, but it hasn't always been that way. The company was once a big player in the mobile gadget realm with its popular BlackBerry smartphones and OS -- especially for the business folks.

But in recent years, competitors like Apple and Samsung have stolen BlackBerry's spotlight and a significant amount of its market share in both the consumer and corporate/government markets. In 2011, BlackBerry had 14 percent of the U.S. smartphone market, and now, it has less than 3 percent.

This means that BlackBerry's wallet is taking a big hit. The company reported a loss of $84 million in the quarter that ended June 1, as well as a decrease of 4 million subscribers. In September, it expected a GAAP net operating loss of $950 to $995 million, and a cut of 4,500 jobs. As of March, BlackBerry had 12,700 employees. 

BlackBerry's board of directors announced the formation of a Special Committee to explore strategic alternatives back in early September to enhance the value and accelerate the development of BlackBerry 10 (BB10) -- the company's latest operating system and line of devices that launched in January. The announcement came only a few days after a report surfaced that BlackBerry might go private in an attempt to fix its problems away from the public. 

BB10 was supposed to save the company earlier this year, but it didn't take off the way BlackBerry expected. Both BB10 hardware releases -- the Z10 and Q10 -- have largely flopped. T-Mobile even took BlackBerry devices off of its shelves. It's releasing the high-end Z30 flagship BB10 phone, but many believe the results will be no different. 

Source: Yahoo Finance



Comments     Threshold


This article is over a month old, voting and posting comments is disabled

These people are just hopeless
By retrospooty on 11/4/2013 9:52:42 AM , Rating: 3
Same thing back in 2012. They couldnt come to a deal becasue RIMM thinks it is worth more than it is. They keep thinking about what it was , not what it can sell. It is now down to 1% marketshare and they STILL wont accept a 4.5 billion dollar offer. Good luck Blackberry, you lost 1 billion dolloars last quarter and your new products are selling worse than your old ones. You are now less than 1/20th your previous stock value and no one wants your 2012 phones in late 2013.




RE: These people are just hopeless
By YearOfTheDingo on 11/4/2013 10:29:20 AM , Rating: 2
My guess is that Fairfax backed out of the deal. It never made much sense to me. Going private won't do any good. BlackBerry's position is beyond salvage at this point. I don't see what kind of restructuring that they could have done to make it a viable concern.


RE: These people are just hopeless
By retrospooty on 11/4/2013 10:38:41 AM , Rating: 2
Yup... It's kind of like this...

RIMM from 2007-2010: (under Balsilie and Lazardis)
Guys, your headed for a reef. You are going to hit it and sink.
RIMM Management: No no, we are fine, stay the course.

RIMM from 2010-2011: (under Balsilie and Lazardis)
Guys, you hit the reef everyone but you saw coming you are sinking, you need to shore up the giant hole.
RIMM Management: No no, we are fine, stay the course.

RIMM 2012-2013:
OK, we are sinking fast - lets dump our captains.
RIMM new CEO: No no, we are fine, stay the course.

RIMM 2013:
OK, we are about gone from the market with a 1% marketshare. At least we have multiple offers on the table.
RIMM Board: Lets reject all offers and dump our captain. That will surely fix it.

Heinz wasn't the issue, the issue was you cant develop new products at a competitive pace. By the time RIMM comes out with something that can compete in 2013 it will be 2016.

Whatever, good luck guys. Get your golden parachutes ready.


RE: These people are just hopeless
By Samus on 11/4/2013 11:58:20 AM , Rating: 2
Solution: Make Blackberry hardware (specifically models with physical keyboards) with skinned QNX-Android.

It'd be a hit. Just huge. There are no candybar keyboard phones on the market and this is what many current and ex-blackberry users are looking for. They could care less about the operating system. It's the keyboard, damnit.


By retrospooty on 11/4/2013 12:03:04 PM , Rating: 2
I dunno about that... "Our customers want great email service with real qwerty keyboards" is what Lazardis and Balsilie kept saying. That drive them right to where they are today. that isn't what most people want. Not enough to sustain a smartphone company. They havge that now and just lost 1 billion dollars last quarter. Billion, with a B - not a typo.


RE: These people are just hopeless
By YearOfTheDingo on 11/4/2013 12:41:26 PM , Rating: 2
I'm not convinced that there're enough customers willing to compromised screen size for a physical keyboard. A pager-size device tightly coupled with a large touch-screen phone might be a more enticing proposition.


RE: These people are just hopeless
By coburn_c on 11/4/2013 11:17:54 PM , Rating: 2
What they need to do is release low cost devices and saturate the prepay market. Does well for Blu and others, imagine what they could do with a name people recognize and affordable yet desirable products. They just need to get the affordable and desirable part down.. I suggest they copy the nexus line


RE: These people are just hopeless
By Motoman on 11/5/2013 12:09:40 AM , Rating: 2
quote:
enough customers willing to compromised screen size for a physical keyboard.


...you mean the way that an on-screen keyboard compromises screen size? By, you know, occupying half of it when it's up?

The BB form factor may no longer be in vogue - but slider and/or flip designs give the best of all possible worlds - a real, full keyboard and a full screen.

The catastrophically retarded think that people with a preference for real keyboards are upset because of a lack of "tactile response" or some such BS. It has nothing to do with that - it has to do with the lack of physically separate buttons, individually raised from the surface with space in-between.

No amount of shenanigans with an on-screen keyboard is ever going to make up for that. And the "feedback" or "response" bits are only talked about at all because the phone companies *can* do those things...regardless of the fact that they're useless and don't address the actual issue. They're only being done because they're the only things that can be done.


RE: These people are just hopeless
By YearOfTheDingo on 11/5/2013 8:36:47 AM , Rating: 2
Onscreen keyboard goes away when you're not using it. As smartphones are used more and more for information consumption rather than input, the trade-off will continue to shift in favor of touch screens.

Personally, I like having a physical keyboard and am willing to accept a smaller screen. The problem is, developers aren't optimizing for such screen dimensions so programs run like crap. Without a critical mass of end-users, the situation ain't going to change.

A slider design can only be scaled up to a certain point before the phone becomes unbalanced in one's hand. A flip design could potentially give you the best of both worlds, but it doesn't quite work with a touch interface.


RE: These people are just hopeless
By Motoman on 11/5/2013 11:19:27 AM , Rating: 2
quote:
Onscreen keyboard goes away when you're not using it.


...that's irrelevant - because it's when you're using it that the problem exists.

In any case, I think ultimately that the BB format simply gave way to full-length keyboard designs...which have been around a *very* long time now, personally starting with the original Envy. Which had an awesome keyboard. And which flipped open instead of sliding...the biggest problem there being that the phone then has to have 2 screens.

You can do a physical keyboard badly...the original Droid had a physical keyboard, but it was *awful*. The keys had no spacing between them, and there was no raising above the surface. Was almost impossible to use.

Anyway...if there's any hope for physical keyboards it's in full-length ones...the BB format just doesn't make sense anymore.


By Reclaimer77 on 11/4/2013 10:18:43 PM , Rating: 2
quote:
It'd be a hit.


Not really.

Look, physical keyboards are dead. They're just dead.

Also the next generation touchscreens for phones will have capacitive feedback that gives a tactile response. That will be the ultimate final nail in the coffin of physical keyboard phones.


RE: These people are just hopeless
By Murloc on 11/5/2013 2:10:58 PM , Rating: 2
nobody except a few nostalgics wants physical keyboards anymore, really....
everyone I see is typing on the screen, and pretty fast at it, and most of them have never used a physical full keyboard (just the old classic one), nor do they want one.


By Reclaimer77 on 11/4/2013 8:06:45 PM , Rating: 2
I can't believe someone thinks this company is worth $4.5b lol. I did a double take when I saw that.

Even their IP, how relevant is it today? Everyone else seems to be doing better without it, so it can't be all that great.


Translation
By Motoman on 11/4/2013 10:49:08 AM , Rating: 5
quote:
"I am pleased to join a company with as much potential as BlackBerry,"


"This place is so f%cked up already there's no possible way I could make it worse."

quote:
BlackBerry is an iconic brand with enormous potential


"A number of people still remember Blackeberrys, and with any luck we can sell them a few new ones before they die."

quote:
I look forward to leading BlackBerry in its turnaround and business model transformation for the benefit of all of its constituencies, including its customers, shareholders and employees."


"Update your resumes, make platform-change plans, and if we manage to get a couple more bucks in the share price sell everything and let's get the f%ck out of here."




LOLOLOL at stupid Mick hahaha :)))
By greenchinesepuck on 11/5/2013 1:59:12 AM , Rating: 2
Dumb micktroll was foaming about impending BB sale for so long

Other dumb trolls like Retro were singing along

And look at how they got pwned YET AGAIN hahaha

HILARIOUS hahahaha :)))




By ritualm on 11/5/2013 7:30:51 PM , Rating: 2
Joke's on you, bro.

This deal is the equivalent of trying to repair a gaping hull breach with a Band-Aid(TM) bandage, while the underlying problems that make BB fail go unresolved. The best outcome for the company is to go private, yet management thought otherwise.

Nortel Networks 2.0, anyone?


Behind the curtain
By BernardP on 11/4/2013 9:41:06 PM , Rating: 2
Interesting analysis by Canada's Financial Post:

http://business.financialpost.com/2013/11/04/black...




"Nowadays, security guys break the Mac every single day. Every single day, they come out with a total exploit, your machine can be taken over totally. I dare anybody to do that once a month on the Windows machine." -- Bill Gates














botimage
Copyright 2014 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki