BlackBerry going private: What does it all mean now that it’s official?

By Chris Umiastowski on 23 Sep 2013 03:20 pm
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On Friday most of the media was busy writing about the 4500 job cuts being the last nail in the coffin for BlackBerry. Today the company shook things up yet again. The rumours of Prem Watsa and his firm, Fairfax Financial, leading a bid to take the company private have proven to be true. The board of directors at BlackBerry has accepted an offer, conditional upon due diligence, of $9 per share.

Let’s put this all in plain English, shall we?  Right now BlackBerry is a public company. Its shares trade on the stock exchange and anybody can go buy or sell stock. I’m a shareholder as are many of you. So if this deal happens, Fairfax and a consortium of investors will buy our shares from us at $9 each. BlackBerry will still exist in the same form as it does today, but it won’t be publicly traded so they won’t have to issue the same kind of press releases or file financial reports. They’ll be able to go silent and hide any negative financial results while they work towards a long term comeback.

I thought it might be helpful to break down how various stakeholders are affected by all this:

BlackBerry customers: This transaction shouldn’t really affect customers since the company will still exist and still sell hardware, software and services. BBM will still go cross platform, and the company will still be fighting to win back market share.  Customers (or possible customers) may read less negative headlines, which could lead more people to buy the products (hey, I can hope ...)

Employees: I think this is a good thing for the people employed by BlackBerry. Going private will allow them to stop worrying about all of the media trash talk. It should help morale. That said, it’s not a golden ticket, and it doesn’t mean layoffs will end. This is still a business and Fairfax (and the other consortium members) are the new owners of the business if this deal happens. There will still be a board of directors working on behalf of these new owners, and management will still be accountable to them. Private companies hire and fire people too. They just don’t have to deal with as much crappy reporting when things go sour.

Shareholders: I see this as a pretty crappy deal for us folks who own stock. Considering the stock dropped to about $8.25 after Friday’s earnings warning and layoff announcement, a $9 cash offer is only slightly above a price that bakes in a huge amount of pessimism. The fact that the board of directors was willing to accept this offer tells us that they felt there was a real risk of huge downside even from $8.25. Being taken private at $9 is nothing short of total failure in my books.

As I write this, the stock is hovering at $8.80, which is below the $9 transaction price. This tells us the stock market has absolutely no confidence that BlackBerry will attract a better competing offer, despite the existence of a go-shop clause allowing them to do exactly this.

CrackBerry: We realize many of you expressed concern for the future of this website. A go-private transaction actually helps CrackBerry. The board, and Fairfax, seem to be pretty convinced that BlackBerry will survive as a niche player with hardware, software and services. That’s what we cover here, for the benefit of the user base. Whether the company is public or private changes nothing in terms of what you guys need from us. That said, since I’m the guy who writes about the stock it will push me to spend more time looking at other things. I like change.

Financial media and analysts: Although they aren’t one and the same, both financial journalists and analysts rely on financial news on which to report or opine. Private companies don’t issue quarterly reports. They don’t press release layoffs. They don’t disclose executive compensation. Equity analysts don’t cover the stocks. So as a result, the financial media will find other stories to talk about and financial analysts will find other stocks to analyze with their extra time. Industry analysts like Gartner and IDC, however, will keep doing what they do. No change for them.

My summary thoughts:  I didn’t think a go-private transaction would happen. I felt (and still feel) that going private won’t help this company execute on its strategy any better than being public would. It’s not like they’re getting a big injection of cash, and if they want to do this they should have done it 2 or 3 years ago.

That said, I recognize that going private doesn’t hurt. It doesn’t make things worse at all.

As a shareholder I’m completely shocked by the pathetic $9 price, and it tells me this company was in way worse shape than many of us thought. We knew things were bad, but for the board to agree on a pathetic premium to a post-selloff stock price?  Disaster.

I’m not holding my breath for a higher offer. I’ll suck up the losses and move on. I still wish the company nothing but the best. I’m glad the employees will be able to go to work without having to read bad news stories in the paper every day on their morning commute. I’m glad the company will still exist and sell products that I actually want to use. I just hope the new owners kill off the acceptance of mediocrity that almost vaporized BlackBerry from existence.

630 comments

shahyaz

Great article, thanks Chris.

HKINDO

If you make a lost on bbry shares, then i hope you know the feeling of those 4500 people losing their jobs (a good thing according to your earlier article).. you lost a portion of your money, they lost their earning for living..

They kill 4500 employees living.. rammed the stock price down with bad balance sheet and a failed bbm launch, then steals from the stock holders.. and to think some of you people cheering for fairfax..

I am done with bbry.. will never buy one of their handset ever again.. just gonna use what i have now till i got something i like.. to think that i supported bb10 platform by buying a z10 before its launch date.. god, i am such an idiot to belive thorsten and his goons..

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HKINDO

I meant this post for Chris u. Btw..

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ShadowBlazes

I think Chris said 4500 people WON'T lose their jobs but some layoffs may happen

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HKINDO

Read his previous article..

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mathking606

the layoffs did not happen just push down the price, they were going to happen sooner or later.

Saucy10

I know a lot of people are talking about the 4500 odd employees who are going to lose their jobs and that they will not support BlackBerry anymore. Job cuts are always a sad thing but it is also a business reality. I mean what other options did BlackBerry have? BBRY is trying to stay afloat and these are necessary measures. Would it have been better if the company went down and instead of 4500, close to 12000 odd people were out of jobs? Please don't think me to be insensitive but I think it should be looked at from a different perspective. They needed to trim and in that way protected the jobs of 7000-8000 employees. Thorston Heins does not have a magic wand that he can wish away the bad financial condition. When he took over as the CEO, He inherited a rotting company. He did his best getting BB10 launched and it is a very solid OS. But market realities were different and they goofed up on the pricing strategy and the marketing strategies. The situation arose because not enough people adopted the platform. Android and iOS is well-entrenched and consumers needed that added incentive (maybe in terms of lower pricing or some really aggressive marketing, or maybe store reps to educate them on the cool features) to switch, which they didn't get.

I think going private is a good decision but I think we need some changes in the management as well. BlackBerry also needs to live up to its commitment to customers wrt everything, starting from product launch dates to what they are going to achieve. It's better to under promise and over deliver than the other way round. They will need to work on improving the brand perception too that has taken a beating over the last 2-3 years.

As regards the valuation, I do believe Fairfax may have clinched a bargain as per my estimates, considering BBRY's cash balance and solid patent portfolio. BBM should have been valued separately based on its future cash generation potential. My estimate was more in the range of $12-13 per share.

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igrar#IM

Thorsten Heins gets tens million of dollars, shareholders 9$ per share and 4500 employees severance cheques ... hmmm

Xandrex_BSCF

exactly. Imagine you are an expert at BlackBerry7, and you're facing BlackBerry10 (based on QNX).
It is an entirely different planet with a different language. What is the CEO supposed to do in such constrained times? train all their Java developers to become C++ developers? Or ask the existing C++ developers (the people from QNX) lead the devs ?

qwerty4ever

Java and C++ share more in common than differentiates these programming languages.

kupfernigk

I can see you have never tried to switch from one to the other at the enterprise level. In terms of enterprise code, the differences are enormous.

k8bushlover

The layoffs haven't even happened yet. It's the timing of the news, the screw-up with BBM on the weekend (who leaked what when? how come that hole couldn't have been plugged?), the timing of the deal, and the timing of the announcement of the deal, it's all just incredibly sad. Oh yes, the timing of finding out about the jet too (deal done months ago, but no matter, reporting now, "breaking news"...)

Nothing to see here, folks, "Keep Moving"

HKINDO

Jaaaa.. didnt happened.. because it will happen not did..

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Chris Umiastowski

That's not what I wrote.  4500 jobs are getting cut.  Sucks, but absolutely necessary.  Also, FWIW these gusy are not losing their careers.  They are just being pushed to move on (with a severance cheque).  It is hard, but I think almost all of them will look back and be glad it happened.  Good people will find new meaningful work.

freddysrevng3

Chris - Good to see you "out and about here"... nice... hey, take a look a my post a few down to answer the question "Incompetence or Master Plan"???

Also, when BlackBerry goes private... CrackBerry becomes a shell of what it once was .... so "thanks" to you and the team for years of enjoyment. Pretty sure I won't be going to "Android World" on here... May get a Z30 and hand over my Z10 - but I have to know that this wasn't "planned" and that the executives at BlackBerry are just that INEPT.

This didn't need to go this way... BB10 should be a hell of a lot more than what it is..

Looks like Frank Boulben May Go...

br14

"CrackBerry becomes a shell of what it once was"

Why? BlackBerry isn't going anywhere. In fact, it goes private with a barrow load of cash and a billion dollars worth of inventory to give away.

It also has a new phone Z30 launching - and apparently picked up by Verizon, who tempted by the low cost Z10's will no doubt push the phones finally - and make a killing.

Combine that with the fact BES10 will get a stable environment to expand market share; BBM going cross platform - and if the leak is anything to go on - going viral; and ECC patents that are worth more than Watsa is paying for the company; and you're left with a hell of a deal for Watsa.

And all because the short sellers have talked this company into the toilet over the past few years.

Pity they're not going to lose their shirts over this but at least they'll move on to other targets. Apple comes to mind...

cwalt2166

hahah...make a killing? who pray tell are going to buy these non-selling phones

br14

Believe it or not there are vast hordes of people with a life, who don't waste their time like us on message boards.

When they buy a phone they tend to buy what the carrier recommends.

Which is why BB10 sales have been so lousy. Because carriers were stuck with masses of iPhone 5s no one wanted and had no choice but to push other devices.

But now that BlackBerry has $1 billion of devices they can actually give away to carriers, I imagine the tables will be turned.

westex74

ah, yes. It's the Carrier's fault. Outstanding!

br14

http://www.bloomberg.com/news/2013-07-10/verizon-seen-owing-apple-up-to-...

I have friends who specifically asked for the Q10 where the sales associate tried to sell them an iPhone. There were other similar stories posted in February for the Z10.

Verizon ended up heavily discounting the iPhone 5.

kozmo68

That's happened to me on separate occasions at two different carriers. They did everything they could to sway me from buying a BlackBerry. No wonder they couldn't unload any units..

ibmbc

Verizon never discounted the iphone 5. Not sure where you got that from. The first time they discounted the 5 was when the 5s was released. And believe me Verizon is absolutely not pushing Apple products on customers - they would still much rather sell droids as the subsidy is significantly less.

As someone who sells Verizon, of course I would recommend an iPhone 5 over a q10. Like it or not, for most people the iPhone is a better fit. It is easier to pick up and use for peope new to smartphones and if they have questions, all they have to do is ask a friend for help. Most people hate learning new things if it can be avoided. And the biggest reason is lack of apps on Blackberry. Like it or not smartphones success is based largely on app availability. And if someone even mentions side loading apps your out of touch. No average consumer wants to deal with that.

I was a loyal blackberry user right up until the 9900 series. The 2+ year gap between that to the blackberry 10 devices was too long a wait, and honestly I was tired of sacrificing things to stay on Blackberry. I still miss the email, but i don't miss much else. And no offense to Blackberry but I could never go back unless they got all the apps I use for work which honestly will never happen.

onvisa

@ibmbc
2+ years? How about saying 2 yrs.
And your saying that the iphone has changed in the 5+ years?
Its the same iphone with new dressing and each time they ADD 1 new feature, yes that's new.

bbq10l

I hardly think you can say masses didn't want the iphone5s. BlackBerry cult members just cannot accept the iphone isa beautiful and functional and people love it. The carriers did not sink BlackBerry - they did this to themselves.

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Jtaylor1986

That's kind of assuming they can find work. That's a lot I'd tech jobs in a country that didn't have many to begin with.

lupin1x

Living in Waterloo I can honestly say that there are still Tech jobs to be found, the outlook isn't as bleak as you paint it to be.

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GTiLeo

theres no need justifying yourself to this clown Chris, its a downsize that needed to hap[pen it sucks people will lose their jobs but such is life

GEO1ER

Not to ever minimize loosing a job, it's tough but I agree with Chris U and Saucy10. Keeping employees you can't afford to pay onboard just to make some kind of moral point will just hurt them in the long run when neither them nor any other BlackBerry employee has a job because the company went under. These guys still have thir careers and opportunities in other companies not going through the struggles that BlackBerry is going through right now.

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HKINDO

"I'm happy to hear about the larger round of job cuts at blackberry" quoted from the title of your previous article Chris..

I rest my case..

Now that they screwed you up of your investment, i hope you wrote another piece: "i am happy every shareholders got screwed, including me"

#sarcasmalert for those who don't have sense of humour..

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qwerty4ever

Agreed HK. Chris is the quintessential 1% elitist as evidenced by this article and his previous article.

hkkelvinlee

Indeed. It is difficult for a stockholder to buy a future BlackBerry device when they know they are paying those guys who almost literally stole from him.

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jaffna_guy

You red my mind bro :). My next phone wont be blackberry for sure. I was planning to buy Z30, not any more. Anyway good luck to BBRY

Ebscer

The fact that the company is private actually makes it more likely that I would support them. (Although that should be nowhere near your top concern)...

klingon

Are they the only one cutting jobs, what happen to apple and the 3000+ who are moving on are they no real people to, you guys make it sound as if BB is the first company to go private, other companies has done it in the past with good results, don't hold a grudge no matter which company you choose they all behave the same they are guided by profits.

SamirSaxena

Sometime back I was reading about how a fire in Chinese manufacturer of iPhone resulted in death of hundreds of workers making iphones.. and Apple shied away from the entire incident.. didn't see lot of bad wishes for the company from the users.. and here we are making a fuss about a posts headline..

If you get the context, you'll understand everyone empathised with all those who lost their jobs..

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menaknow

Agreed, after playbook, failed execution on BBM etc and know being shafted as a shareholder...

I'm done.

Probably have to settle for that other fruit...

cdobes

I plan to still support them, but you know that crappy feeling us shareholders are feeling now? That's going to be nothing compared to how it's going to feel to watch this company rise from the ashes and go public again at $50! Not saying it will happen, but if it does just imagine how that will feel!! We got shafted.

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JonCBK

If there is an IPO in three years at $30, yeah, I as a shareholder will feel pretty screwed. But I will also feel a little vindicated. I can say "The Market got it wrong, but I didn't." That will be the silver lining on that cloud.

fast666

Exactly after Heins and Watsa screwed us shareholders badly, it's hard to remain loyal to BlackBerry. Time to move on.

ChannelX C000D3759 We feature top channels

jsocan

Sure feel that way.

Why the company has been preserving a high cash position in the past few quarters and not committing any serious effort and money in marketing BB10 phones to the consumers? Why are the phones priced so high that almost guarantees low sales? The cash balance sure makes it easier to finance the go-private bid, and the 'engineered' poor sales would ensure no one else would be interested to put in a competing offer.

How inept can management be to allow unsold inventory to run up to a billion dollars within a quarter? How convenient that they don't need to report the next quarter results if going private and perhaps suddenly can sell the inventory for more than the written off value. That sure is value creation, but for the private owners instead of the shareholders.

I'm all for the private bid by Fairfax so the company can remain intact under Canadian hands. However, the feeling that the company has not tried their best but has been laying the path for Plan B leaves long term investors like me a bad taste.

MrJohnyBoy

Suck it up Butter Cup....this is the nature of dealing in the stock market, sometimes you win, sometimes you loose. If you can't afford the losses you should be dealing in stocks.

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Anonymous2039

*lose

--Q10 and Canadian all the way! Posted via CB10 on 10.2.0.1443. #IChooseBlackBerry10

michaelshawn

It's a different story when a company does it intentionally

Posted from My all in one beauty Z10

k8bushlover

Abso-freaking-lutely. They did all this intentionally, no question in my mind. But it will take one crackerjack team of lawyers to prove that, and you don't think BlackBerry knows any lawyers, do you?

br14

They didn't talk down their stock from $140 to $8 intentionally.

And it isn't so long ago the stock was around $6.

Anyone buying the stock was hoping to make a fortune in the belief BB10 would be a success.

It wasn't and we lost. If you gambled on a tech stock in the belief you couldn't lose, that isn't BlackBerrys fault.

Danny Ocean

Let's not forget those of us who bought at just over $6 and sold around $14. Even bagholders who bought at that level will come out ahead. You have to recognize the difference between a trade and an investment and buy smart. And if you can't afford losses, don't bet on turbulent companies.

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guygardner73

+1 some you win, some you lose. There are no guarantees on the market. You don't sit at the poker table with cash you can't afford to lose.

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barney009

Not really. Shares are always a risk everyone knows that.

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NotGoodIMO

@MrJohnyBoy,
Every one knows risk of investing in the stock market but this is pure manipulation or absolute incompetency on the part of Blackberry management and the board. Which one is it? I hope we will find out. Looking at Heins, I always thought he looked more stupid than thief but you never know. LOL.

fast666

+10000

ChannelX C000D3759 We feature top channels

jsocan

+1000. The moment they brought Tim into the board, Plan B has already become Plan A. Any wonder why Q5, a phone targeting the entry level and youth, is priced so high and only have the black color model launched in some markets? Didn't BlackBerry said there were more female than male subscribers? How come pink Q5 never get released.

kupfernigk

Q5 is much cheaper than the iPhone 5c, but is basically the same technology. It is only high priced compared to lower spec machines like the Nexus 4 - no 4G and poor battery life - or the Nokias which were in a fire sale anyway to get sales pending the Microsoft acquisition. These conspiracy theories just don't seem to recognise market reality - that if you sell something for less than it cost to design, make, market and sell, you will soon have no business.

ovi08

They didn't steal from the shareholders. No one is holding a gun to your head telling you to buy BB stock. And if you really didn't want to lose your investment, you should have sold your shares a while back. Buying shares is a risk and you should know that before you buy. If you don't want risk go buy a government bond or something.

NotGoodIMO

@onvi08,
you sound too wise to be posting here. Did you takes lessons from Mr Heins and co.? Ever heard of stock manipulation? Retail shareholders of common stock have virtually no power at all and are at the mercy of management and BOD. The main thing here is trust and investing is risky but shareholders still expect no foul play. I have to say that lot of what has been going on with Blackberry doesn't make any sense, from poor execution to pre earning release, BBM screw up, and the sudden buyout of more than 20% below the price at which Blackberry was trading before the warning on last Friday.

Adhamalghamdi

Whatever happened today if they didn't kill 4500 employees living, the hole company will go down soon and then more employees will be looking for new jobs!
Do you think that they just want to have fun by making 4500 people lose their jobs ?! I Don't think so.
Its just something bigger than them.

vgorous

Wtf did you want them to do? Keep all the employees, and just let the company go bankrupt? Either way, they would have lost their jobs.

Seriously. Think. Let them keep their job. Then what? How long will that last? The only fault BlackBerry made was they didn't react fast enough to the market.

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AnotherBillJ

There's everything negative about BlackBerry summed up in a nutshell: "The only fault BlackBerry made was they didn't react fast enough to the market." (Well, said, vgorous.)

Let's first accept one fact as true: BB10 devices are as good as anything out there presently and the Z30 should prove to outdo even the Z10, Q10 and Q5 in performance. Assuming that, had Thor stepped in 2-3 years sooner and these BB10 devices were available just as BlackBerry was starting to slide, more market share could have been kept. I'm convinced that many people jumped from BlackBerry based largely on the negative press the company has been receiving over the past couple of years.

Cheers. :)

Neil Anthony Graham

When I look at the toys (apple and Samsung) being pushed by sales persons as tools for business I tend to feel almost insulted. They look in disbelief when I ask about BB. These people give me the impression that bb service is about to be discontinued, for this reason only I've not upgraded to Z10.

jsocan

No issue about the right sizing to keep the company in the game to turn it around. Issue is the timing of going private when Z30 and OS 10.2 are ready to launch and have the best chance to gain traction and show better results in the next earnings report in December. Why the haste to announce the consideration of strategic alternatives to further hamper sales when there weren't even any other takeover bids (now we know because the go-private bid would have been much higher to fend off the other bids)? They are stealing the fruit of the turnaround from long term investors who haven't abandoned the company and letting the damaging short sellers off the hook with such a low bid. That does not look right to me.

edriss

Posted from CB10 via Zed10.

edriss

Be realistic, who will buy a BlackBerry when you go to a store and the clerks try to sell you an android or iPhone? I'm talking from personal experience. And the car was so pushy. Oooh and he actually said "why w

Posted from CB10 via Zed10.

tinochiko

If they sort out BBM in time, the share value will rocket..

Kind Regards, Tino Chiko C0008DDD1 TechCraze!

Dave79

Really? If that was true they'd find a technical issue to postpone the launch till after the privatization! Wake up guys the management is not there to make a success out of BBRY right now!

koolrosh

Unless they bring someone from Silicon Valley. Someone with experience in a big tech company. This company is doomed. It's a horse with no head.

Play Starcraft? Join our Channel: C001242DE

Grumple

No it won't, even if BBM is released and is ridiculously successful that share price is not going anywhere. The only reason it will go up past $9 at this point is if it looks like another offer is going to come in or if one actually does, and if you have followed the market at all today it does not look like anyone is expecting that to happen. Even then, a competing offer would not "rocket" above the current offer.

fast666

Tino I have a suspicion that BBM failure is on purpose. No one can be so inept.

ChannelX C000D3759 We feature top channels

tombstonebb

Exactly my thoughts on the POTUS

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Plazmic Flame

Whenever Chris Umi comes in and writes and article, I always think of that part in Tron: Legacy where Kevin Flynn shows up and shuts the whole damn place down!!

Good article! Spot on about the stock price.... :(

Georgefly97

Omg I love that movie! Good point though...

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Supa_Fly1

The original was so much more relevant! Plus who noticed the PK Ripper at the start of the movie another huge milestone in history like that of the arcade.

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BBPandy

hehe good analogy. It's true, whenever Chris posts an article everyone on CB stops & pays attention to what he has to say.

diegonei

As usual. And I dare anyone to say he was sugarcoating the news...

Mister Sir

Just by the very fact that the author owns BlackBerry shares (probably at a loss), means that this article has no credibility.

Posted via CB10 on my Black Z10.

kellidotca

This isn't a news story, this is a blog post, at best. I guess if you had to compare, it's a column and columns are opinion-based and therefore get to be biased. Just by the very fact that he owns bb shares means his column is based on his opinion backed by his experience.

BBPandy

The author also owns Apple shares which climbed $20 today so I really wouldn't hold that against him. ALSO, the Prem who just purchased BlackBerry (assuming the deal goes through) owned 10% of BlackBerry so he obviously feels that there is value in the company.

Plazmic Flame

I laughed so hard! He obviously has no idea who Chris Umi is, lol.

Also, if he never said he owned shares, you would never know because the article is well balanced without bias. His credibility is also a lot higher than yours....

Chris Umiastowski

Most of my shares are certainly at a loss.  But it's OK because I admit it :)  But isn't the real issue here how your name consists of two salutations ... and what are you prepared to do about the mass confusion this is causing among CrackBerry nation?

k-fos

"but isn't the real issue here..." ha ha..

1magine

If only someone could have seen this coming and warned those buying shares it was a poor investment. If only someone on Crackberry might have been warning of this day for the last 3 + years. If only...

eddy_berry

Yea. Who on a BlackBerry fan site would tell people not to invest in BlackBerry? Would Kevin tell people not to buy BlackBerry phones? Can't stockholders make their own informed decisions? Is that not the game one plays in the stock market? There were more analysts telling you to get out then get in. So what is your point?

br14

Are you serious?

For the past three years every financial blog on the net has been talking BlackBerry down.

You'd have to have your head pretty deep in the sand not to be aware of the companies troubles. It was always wishful thinking on our part that the company would turn itself around. Perhaps it will yet. But not as a public company.

merlinpit

Do you admit also foul play?

Dave79

Yep, always good reading Chris.

As a shareholder I’m not "completely shocked by the pathetic $9 price" even since Prem Watsa stepped down I guessed things were gonna end like this, so I sold the majority of my stock when it when up to around 11$.

No matter what people say I think they were working on this plan at least since March and drove the stock down to peanuts on purpose. They have done nothing to "accelerate the deployment of BB10". Non existent marketing, wrong device pricing, the joke BBM cross platform launch - they've done everything they could to drive price down and prepare to buy the company for peanuts. Why would the CEO have in the contract a pay fee of $60 millions, in the first place. Do you think he worked the last year in order to sell the company or making BB10 a success? If the future owner of BB was the CEO current employer (member of the board) whose interest do you think the CEO was going to execute on?

To me these are legalized frauds. 90% is the delisting are.

RetroAndreas

Good comment. Not sure if that's what happened, but very possible.

NotGoodIMO

Lookiing back that sounds like a very convincing reasoning for everything Blackberry management has done.

fast666

Dave 79, ditto.

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Pdoody

In addition to your comment, isn't it interesting that they took a huge inventory write down? This really helped make the quarter look dismal.

Chris, maybe you can elaborate, but won’t an excessive write down in this quarter only help profitability in the next?

Again, all things add up to no good.

BTW, Chris, I always appreciate your logical explanations you have been a huge asset to us and CrackBerry. Thanks.

Posted via CB10

amazingtoy

If that is the case, I will be absolutely disappointed. They don't get my respect. I still remember the nasty analysis last year stated the value of BlackBerry was $12.00 before promoting the new Z10. And now, Fairfax is able to get it at $9.00. What a great deal! It's unbelievable!

dmurillo3

Well if you think there is fraudulent reporting take it up with the SEC. I'm not saying I don't believe there was some $hit going on behind the scenes. A nice class action lawsuit would be nice right now. Burn the mo'fo down to the ground!b

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freddysrevng3

Chris - Nice article, but here is the "rub"...... I traded in my Samsung Galaxy S3 to get a Z10 - Z10 is "superior" in so many ways...

Question: Is Frank Boulben (and the group who hired him) that "Incompetent" or was this a "Prem lead Master Plan" all along?

95% of people that I show my Z10 to say "That's a BlackBerry"??? because they think it is cool and looks like an iPhone blah, blah, blah....

Why do people living in an affluent area of Chicago Il not know what a BlackBerry Z10 is?

Who's FAULT is that?

Is the team of executives at BlackBerry Incompetent or was this Planned?

There is no way in hell that people should not know about how terrific BB10 is...

Anyone??? Help me on this one...

kozmo68

I'm not sure what exactly happened, but the conspiracy theorist in me has begun to wonder about many of the same things, especially when you sit back and look at all the plays as a Monday morning quarterback.. Frank and his marketing was a joke! Why spend $1 million on a Super Bowl ad that really doesn't tell you anything about the phones or the platform? And to top it off, you do it nearly 5 months before phones are going to be available in that market? COME ON! REALLY! There are better, more compelling and informative ads on YouTube by people with really passion for the company. That million could have been better spent on in store incentives for staff, you want people to push your product then you better help grease the wheel with some cash. They could have picked the 10 busiest carrier stores and given each store $100k to provide incentives to staff, or do $50k over 20 or so on. For someone one making minimum wage, that's a lot of extra $'s for me to push a product, you better believe I'm going to try and steer you in that direction. In MHO, none of their marketing ever resonated with people, and I find it all to be kind of ho hum.. It's not how you're suppose to be launching a platform.. Elisha Keys, a joke, WTF has she done? and on and on.. I don't know for sure but I'm starting to feel like I've been duped, and I don't like it..

dannyd86

Article is missing one point. Whats next for devices!

Enterprise dont need updates very often. The consumer market has a 1-2 year update cycle. 2 years according to a contract but the manufacturer puts out a new device yearly. Enterprise update in much longer stretches.

So its safe to say you wont see an updated Z10 or Q10 for a long time, minaswell switch to android or IOS if your employer didnt buy that phone for you.

BlackBerrari

No matter what, sell this thing and keep Mr. Heins employed, don't know what for, maybe to keep the next CEOs office clean or at least in the Mail or Facility Management dept. Or even better... let him clean the airplanes...

As long as he's employed, he's not entitled to the 55mln...!!!!!

Posted via CB10

JimmyMezaR

I really like this part: "Customers (or possible customers) may read less negative headlines, which could lead more people to buy the products (hey, I can hope ...)".
I dont know why there were to many headlines about how bad was going to BlackBerry. That was bad for marketing.

diogoteixeira87

Finally, Chris. Hope it's good move! I want to keep buying bb phones!

Posted via CB10

Flip4Bytes

lost money but I still choose BBRY :)

Anonymous2039

Clearly you don't know how the +1 thing works. It means that one more person (you) agrees with whatever is being referred to. Unless you are 1000 people, you're comment doesn't make sense.

--Q10 and Canadian all the way! Posted via CB10 on 10.2.0.1443. #IChooseBlackBerry10

wolffkrieger

Don't feel sad, there's a lot of +1000's going around.

Here have some: +1000

Flip4Bytes

You have one! And you have one! heck, everybody have one!
+1 +1 +1 +1 +1 +1 +1 +1 +1 +1 +1 +1 +1 +1 +1 +1
Plus Ones for eeeeeeeeryboddyyyy! :D

Flip4Bytes

hahaha why thank you kind sir! =D

tw1g_007

That's the spirit. Thank you for seeing the bigger picture.

via CB10 (BB Z10 : BLK : OS 10.1) [ Channel @ C0012477B for BB News, MMA & Tech Updates ]

theRock1975

+10000. I am losing quite a bit but I think more bids will come in. The offer is way too low for other tech companies to let slide.

I will continue to buy blackberries for the same reason I bought them in the past. I buy a smartphone for its communication abilities. To me, there is no other product that suits my needs better. After 7 months of use, my phone is running as good as it did on day 1. No complaints at all.

In my opinion, my z10 is still way ahead the competition when it comes to multitasking, stability and security. As for apps, I have everything I need on bb10.

In a side note, I visited an arcade while on vacation and saw fruit ninja and Temple run arcades. Oh man, the kids don't know what they have missed.

Posted via CB10

Flip4Bytes

While I want to agree and my wallet wants to agree, I simply cannot - sadly. After seeing everything that happened the past few days, I am being extremely realistic on the situation.

- BBM was not able to prove itself yet so BBM has very little to no value (currently speaking of course.. BBM will probably be a HUGE hit, but it wont gain value until it gets adopted cross platform, and sadly us shareholders are now not able to benefit from this.)
- No company is looking for a hardware manufacturer, all the big players already have their own, leaving the hardware section worth little to nothing.
- Their OS still needs time to prove itself, heck 10.2 finally caught up to the competitors, but the shareholders don't even get the chance to see how the reviewers react to the new 10.2 OS, so that's worth little to nothing for us.

It sucks that we lost money, but I would much rather BlackBerry go private than it being sold to Microsoft to just be broken up and sold off except for what they want.

As a consumer I am ecstatic, this is the best thing that could have happened, as a shareholder, it sucks. But I'd rather lose some money to be able to buy a new BlackBerry device a year from now, than break even and never be able to purchase a BlackBerry device ever again. It sucks, but I'm relieved at the same time.

Long Live BlackBerry :)

sunsetblow

That is basically the most ridiculous thing I have ever read.

Posted via CB10

Q10Nutter

Same here. I lost almost 35% but long live blackberry. If i was just a customer i would be extremely happy.

kw9700

Don't spend your grocery money in the stock market folks...

Flip4Bytes

Noone said that they did.. I am a college student and this is my first time in the stock market. I was there for the ups and downs and it was definitely an experience.. I could have sold when I doubled my investment, but I wanted to keep it for the long - I learned a lot about taking my own feelings away from the stock market, because the stock market doesn't take into consideration people's feelings [; So sure, I could have spent the money I lost on buying a nice new computer, but at the end of the day, we all make mistakes, and I'm as happy as I can possibly be having lost as much as I have. It was a learning experience, and compared to how much I am spending on college at the moment, this was actually a VERY cheap experience [;

Keep Calm and BlackBerry On! :)

duckshooter

Well there is hope I guess.......

Spreading the love with my Z10

bbschorsch

Let's hope the best

Posted via CB10

jason8957

The new group will loot the cash, license out the patents, and sell off any of the enterprise stuff.

Loc22

In that case then everything is lost

Posted via CB10

BBPandy

agreed, but I don't think Prem is planning on doing that. I wish we knew if Mike L was part of the consortium.

jason8957

I hope it isn't like that. I was pulling for BB, but the writing has been on the wall. This is a company that just didn't see what was happening to it for years. Business schools will do studies on this.
A private equity group... this is run by people who probably don't care. They are looking to generate revenue or turn a profit. Which means licensing and selling stuff off. If they do try to manage (or hire someone to manage) this company, I can't help but think about Cerberus and Chrysler.
Sad.

rapperman

This was my thought exactly. Two types of investors, those who search for a bargain, make the purchase and then sell in bits and pieces for a quick and tidy return on their investment, or those who invest for slow but steady, long term financial gain (primarily through the licensing of intellectual property).

I am not convinced that this buyout is for any reason other than one of the above, but I'm keeping my fingers crossed that these guys really and truly have faith in the company and its products and intend to put everything they have into rebuilding the brand.

BBNation

So it was all fixed game for few weeks now, earning warning, BBM hold, lost so much money..

stlscott18

Agreed. Price gets low - bid comes in at $9 a share. Thanks.

Tyler Nellissen

Do I have to manually sell my stock or will it simply disappear and money will appear in my account? I've never been in this position before.

Damatrix02

Me Neither -- sad I got into it.

JJStripes

You don't have to do anything. If you want cash now then sell in the open market. If you want to hold on in hopes of a higher bid then keep your shares until they take them.

abwan11

Insider bs

Posted via CB10

abwan11

Didn't Prem say it was worth 40, last year when the stock was trading at 6?

Posted via CB10

itsnotaboutart

You can't blame Prem even if he thinks the stock us still worth $40 (which is a big assumption) . The whole point of making the offer is that hour thinks the true value is more than the amount hour is paying. Blame the BlackBerry board of directors for thinking that the shares are not worth more (or for overseeing the downfall that led to the situation where no other bidders think it's worth more).

Posted via CB10

itsnotaboutart

*he (not hour) both times. Appropriate that the much praised auto-correct fails me twice on this sad day.

Posted via CB10

venious

I say this private equity company is gonna milk out all the value, then drive it into the ground. Bain Capital style.

Posted via CB10

maclaskey

Bain capital helped many business stay alive and keep providing jobs for many people. Wth you talking about. So much better than a damn government bail out. This is a good thing for BlackBerry as it was headed for doom anyways. Breath of fresh air now

Posted via CB10 with Z10

Driftdreams

You are a lunatic if you believe a private firm wouldn't gut the hell out of BlackBerry and spread out its parts all over. Its what they do... Its where the money is. At the end of the day, they work towards the best option for THEM... NOT BlackBerry. Business 101, buddy.

pdizzle27

1. Just like Bain capitol, their sole purpose is to make a profit for their shareholders. It is not to keep a "business alive and provide jobs". They will do whatever makes the most money for THEIR shareholders.

2. Unless you live in Canada, why would you care if they received a "damn government bail out"?

stlscott18

Dude, private equity companies are not freaking evil. They provide capital to firms that need it. Let's be honest, what else was Blackberry going to do? This firm just injected $4.7 billion into BBRY. Does it require a return? Yes, but let's not speculate yet.

hkkelvinlee

Is the buyer paying those millions into BlackBerry for R&D or just paying existing stockholders?

Posted via CB10

stlscott18

I have not read the details of the buyout. That is a great question though - will most of the money go to procure public shares, or will it go into efforts to rebuild the brand. Selfishly, I would hope BBRY continues to make viable hardware solutions as this is has historically been the backbone of their firm. People in the US laugh at me when they see I use a Q10. I love the way it feels, it's seems like a quality build. I love the LED feature - nobody else offers this.

Xandrex_BSCF

BlackBerry will focus on selling services (BBM Channels, BES). And with BES, comes all kind of infrastructures and hardware handheld (aka Blackberry smartphones like the Z10 Q10 Z30 and so on).

Since BIS revenue is disappearing, they will also emphasize on software (QNX for cars & other real-time demanding system)s and on Over-The-Air upgrades (for OS modules, or for apps).

cd1105

Lmao sh*t reading ur comment...i live n nyc and I get laughed @ and ridicule all the time cause I use a BlackBerry z10.....,but I'm standing strong(smh)

ƇƯRƬ.ʑ10

gregorylkelly

I don't see many BlackBerry 10 devices, but not a single person that has seen mine (in CT) has ever made a negative comment. In fact, it is mostly former BlackBerry users that are intrigued by the Z10s keyboard and better app selection than their old BBOS phones.

Posted via CB10

stlscott18

Most people that see the Q10 have a clue what it can do. They just say there's no apps.....I'm like, are you that ill informed? Geez. I brought up Docs to Go yesterday to a colleague and he kept talking why the tablet cannot replace the PC because you can't save / edit word documents on an Ipad. OMG...

Chris Umiastowski

None of the money actually goes to the company. It all goes to existing shareholders.

Spades1234

But if BB had three million in cash, and nearly zero debt, aren't they effectively getting the whole company on the cheap for 4.7B? I mean, what about the patents?

Unless this upcoming report changes those dynamics significantly. :S

JakeTheCat

You are correct. The $4.7B will go to existing shareholders. If you subtract the $2.6B in cash that means this will cost them, net, about $2.1B to buy all of the company. (That is a simplification, but you get the idea.)

The patents and other intangible assets were not written down (materially) otherwise that would have been announced as an additional source of losses in Friday's earnings pre-announcement. But I've been wrong before when it comes to what BlackBerry must announce and when they actually get around to announcing it. If, however, there does turn out to be a large write-down of intangible assets between now and when they report officially there is something very fishy going on.

The board should not, in good faith, recommend shareholders accept an offer that comes in below the value of the net cash and assets that they have been claiming are there this whole time - their fundamental fiduciary duty is to get a fair value or else say no. The only way that directors can justify the low bid we see here as being "fair value" is if they start writing things down retroactively to make the numbers work. If that happens then you will know the fix is in (in which case directors would be opening themselves up to personal liability). Unless, of course, the massive inventory writedown was pushed through this quarter to achieve the same effect. It will be interesting to see all the numbers next on Friday and how strongly the board pushes for accepting a $9 offer.

theflew

From what I've read/heard about BB patents is that they have limited value because they are already licensed by the respective companies that need them. So they basically have zero value outside of the ongoing revenue they generate. Given the write down on inventory the current BB10 devices (sans Z30) have little value as well.

JakeTheCat

Despite what you have read/heard the fact is that assets have to be tested for impairment. If what you think is true - the patents are worth zero beyond the ongoing revenue they generate and that stream of ongoing revenue has limited present value - then the assets are impared and will have to be written down. Otherwise it is a low offer that can not be justified by the board. We will just have to wait and see I guess.

travaz

Private companies do not buy other companies to lose money. They must feel there is a reason to become succesful again. Yes breaking it up and selling it of is an option if there is any money in that option. Turnit around and sell for 20 Billion.

SK122387

I can't stand Mitt Romney, but hey, Staples is still alive today, and we have Bain Capital to thank.

venious

Yeah staples is an awesome performer. Ask the employees how much they enjoyed their Bain capital leadership.

http://www.bostonglobe.com/business/2013/08/26/staples-swaps-fall-with-s...

Posted via CB10

L_Boogie820

I still think my Z-10 is the best phone on the market especially after all my friends have iPhone 5s with iOS7 and many of them hate the update.

Things will get better.

Posted via CB10

ANGreen1

When you have millions of customers you're going to have a lot of people that hate change. Does that surprise you? Even regardless of that fact, the majority do like it. It's clearly better than iOS6.

The irony is that you're condemning this change, while it was RIM NOT changing when the iPhone came out that has doomed them. iPhone getting better is NOT better for Blackberry. You are completely clueless.

gregorylkelly

To be fair, many of the changes didn't improve anything and were just changed to make a change. Those are the ones that the people I know on iOS 7 are not happy about.

Posted via CB10

cd1105

I argree!!!!

ƇƯRƬ.ʑ10

Rez91

As a shareholder, this article was really well written and very accurate in my eyes.

Posted via CB10

nalin909

Nice article :)

Posted via CB 10 on my BlackBerry Z10

Peter Lee4

Another fine piece Chris! You know your stuff dude.

scienceboy

I invest in real estate, not the gambling casino that is the stock market. I do however support BlackBerry by buying their products, and insisting that my company buys their products. I am extremely happy that this will continue and I think Prem Watsa is just the kind of guy that could make the long term vision of this great company happen.

All that said, there is much they need to do better and I can only hope that going private will make them do just that.

jason8957

Yeah, real estate has never behaved like the stock market.

sbx9900

Real estate can be rented out while waiting for a better market to sell. Stock market? no. you either win, or lose or ride it out if you don't need the money right away

jason8957

In theory real estate can be rented out, if there are renters. If not, you are paying property taxes to multiple entities, paying mortgage, maintaining and managing the property, and paying to acquire customers.
In good times equities do quite well and so does real estate. In bad times equities and real estate can cost you money. It can cost thousands to transact real estate. Stock trading commissions are barely worth mentioning.

Corey Hurst1

You can rent stocks out, they are called options, and anyone who holds 100 shares of a particular company can rent them out for a premium.

ARWestenberger

I'm swear everyone was saying something like this about Thor in the beginning, and now everyone is calling for his head.

BlackBerry Z10 | Verizon | 10.2.0.1725 @addm | 333ACECA | C00056F02

FryBerry

I hope for all the same things. I personally think BlackBerry is sitting on a gold mine of patents and possibilities; they just need correct leadership.

Posted via CB10

RECOOL

Ridiculously true suit guys are just that suit data capturers nothing more.Too far out of touch with ground level work.I can bet you easy money that a dev from one of the teams would do far better than any of the board room.

ARWestenberger

Some of those patents they don't own outright. I think $4.7b is more than enough for BlackBerry at this point. Now it's time to merry TAT and QNX and leave them alone to do their thing to bring their cool ideas to us finally.

BlackBerry Z10 | Verizon | 10.2.0.1725 @addm | 333ACECA | C00056F02

opalma

+1
I Hope this only brings good thing for the company

Peter Lee4

And yes, crappy deal for investors... I just lost a bit of money.

bbmtna

Thanks for the write up Chris,
You've shed the light I needed on the matter.

iamrauu

Keep on moving...

Posted via CB10

airmo

thank you for this Chris!

bigglybobblyboo

Hey, you never know, they may come with an actual Marketing strategy!

walt63

More importantly, does this mean that OS updates will be served through BlackBerry and not the carrier.

Joking...but serious

All in all, I hope this help BlackBerry overall as a company. I've been in love with their devices since 2008. I dont want to leave.

Now that the dust is clearing, make things happen BlackBerry.

shupor

"I just hope the new owners kill off the acceptance of mediocrity that almost vaporized BlackBerry from existence" -------

My favorite part of the entire post.

njrPTA9273

Amen

Posted via CB10 from my Z10 or PlayBook!

insurancebroker

The "new owners" own 10% of BlackBerry and had a seat on the board. They participated in the culture that accepted mediocrity and nearly "vaporized" BlackBerry. Guess again.

Chris Umiastowski

Totally true (unfortunately).  I just liked how it sounded when I wrote it :)

1magine

Thanks for admitting that CU! Many people actually railed against TH becoming CEO. And recognized that this one board decision doomed the company. TH had no vision. He was responsible for the Tour, the Storm, the Storm2, the 9850, the choice of the Playbook over a QNX handheld, the mishandling/ lies about BBOS6 coming to all OS5 handhelds, the BB7 theme studio fiasco, and so much more. I shorted BB every day since TH took over and made more than my initial losses from 100 down to 60.

It is never helpful to believe your own hype, confuse your hopes and desires for reality, or see a company as the product they produce.

br14

"He was responsible for the Tour, the Storm, the Storm2, the 9850, the choice of the Playbook over a QNX handheld, the mishandling/ lies about BBOS6 coming to all OS5 handhelds, the BB7 theme studio fiasco, and so much more."

He's only been CEO for 18 months. So he isn't responsible for the above. Those were the responsiblity of others.

And since BB10 was launched they've actually been pretty good at delivery. The BBM fiasco has been disappointing but no doubt they'll have a fixed version out soon.

BlackBerry has suffered dreadfully from negative PR generated in the main by persons hoping the manipulate the stock price downward. Financial blogs are full of morons who know very little about their chosen subject pronouncing the death of BlackBerry as they shorted the stock. It's a self fulfilling prophecy.

Freed from that negativity BlackBerry has the chance to restore credibility on the basis of its products alone.

My guess is within 3 years they'll go public again with a huge premium for Prem Watsa and his associates.

1magine

You could not be more wrong. He was COO of Products. The devices and decisions I mentioned were his babies. Being so uninformed, I hope you weren't an investor.

br14

Chief "Operating" Officer.

What has that to do with R&D?

Jtaylor1986

What are the ramifications of the fact that the Prem was a former board member and they all most likely had a relationship with him?

Xandrex_BSCF

He had some information dated from the time before he resigned from his position at the board.
Nothing more, but nothing less.

My personal belief is that he has a very deep knowledge of how BlackBerry operations work today, and probably knows best either how to split in juicy parts to sell, or how to change the ops to make a better execution (this includes probably a slightly different business model and partnerships).

br14

He bought it as a going concern at $50.

He clearly saw value in the company then, and I doubt his opinion has changed. He may take strategic options to sell off parts of the company, but I believe they'll continue to retain most of what we currently know as BlackBerry.

MLE724

Stockholder and BlackBerry user here as well. And I suspect the $9 offer is the initial offer and there will be movement, be it good or bad to that number before we reach the deadline of the pending deal. Let's hope that the buyout offer as well as the company continue to "Move Forward".

pstrohecker

I believe the $9 offer was accepted by the board.

br14

The price isn't going anywhere unless someone comes in with a higher bid that the board accept.

Given they've spent over a year looking for a buyer that isn't likely.

Jonathank

I was a shareholder buying at 7 and then selling at 16 I'm out of the game and left as a happy investor. I'm just glad the company will still exist. Sorry for the ones who still have stock. Guess I made the right decision when I sold my share

Sent from the Amazing Z10

Zezel

Buying common shares is a suckers game. I'm older than most of you so I've had my ass handed to me by companies before.

Fairfax got patents, capital assets hardware etc for basically. $1.6b.

It's a good deal for them. If they can do what they want they will sell patents.

But for the BlackBerry brand it is the end. This prosumer mantra and little consumer adaptation or focus along with no stock analysis means the BlackBerry will disappear from the mindset of the average Joe and Jane.

Zezel.com - Mobile: Monitor. Manage.

br14

"But for the BlackBerry brand it is the end"

Why? Watsa bought in initially at $50. He's a value investor. The man is looking to make a killing over time. He'll turn this ship around and go public in a few years time and win a massive premium for his investors.

Ernest Che

The way I see it:

- although this might be bad news for shareholders, it could have been much worse and there was no way out with all the bashing BlackBerry was getting

- the company going private is a blessing because:

1- they can plan long term instead of focusing on short term quarterly result delivery

2- they don't have to publish results so they won't be the focus of the bad media and monitoring

3- with numbers out of the picture people will focus more on the product and the technology

Posted via CB10

Rickster1

Would be nice to do an article on valuation. 2.5 billion cash, $1.5 billion patents ( UBS valuation), 1 billion inventory write down ( free inventory for the company to sell for whatever they want to jump start sales. Handsets are written down to zero so any sales on this write off generate a cash flow, value of service revenue, value of enterprise, value of QNX. Pretty sweet deal foe Fairfax to give them some breathing room to move forward!!!!

Posted via CB10

sleekmustang

Here's hoping things go up from here.

pcguy514

If they (tax)write down the price on paper and then make a profit, they HAVE TO reflect that...

mcournoyer

Read an analyst's note this morning (prior to the going-private announcement) that pegged BBRY's value at $8/share: "$4 per share of cash by the end of fiscal 2014 (versus $5 per share on hand today), patents of $2 based on recent sales prices, and $2 per share f or the salvage value of net assets and/or an acquisition premium."

This is really the only chance the company has to survive, getting out of the hot glare of the markets where they can make drastic changes and lose more money for a while without it being a headline every quarter. Same situation as Dell, only more urgent.

bluetroll

thanks for your insights.

stlscott18

I lost money on this deal too. poop. At least all the rumors will stop. BBRY will no longer be listed, and all the negative junk / articles / speculation about the firm will go away (at least I think). Remember that this purchase will infuse a bunch of cash back into an already strong balance sheet for BBRY. Last I looked, around $1.5 billion of cash on hand with no long-term debt obligations. I'd take that balance sheet any day of the week. I really enjoy my Q10 - although there's a dire need to get 10.2 out here :). Ultimately, Fairfax, being a private equity firm will someday require a nice return. The question is, will BBRY have to go public again to do this to raise enough cash to pay Fairfax back?

Kevin Clough

In Friday's release it said they have 2.7 billion cash on hand. This deal won't put any additional cash into the company but rather it goes to current stock holders to buy their shares. BBRY has plenty of cash to continue to makeover their business so I think they will be fine.

theflew

I'm tired of hearing how much cash BB has on hand. Half of their current issue is they don't have enough money to market their devices and services in a way that is meaningful to the consumer. It's like starving to death when you have food in the refrigerator. The only reason WP has gained any traction is Nokia, Microsoft, AT&T, etc... actually started advertising on the web, TV, magazines, newspapers, web, etc... and having a consistent message. And then Nokia making a device (Lumia 520) that was accessible to a market this is actually growing.

The issue is this deal does nothing to increase BB cash flow, so the only thing they can do is reduce their expenses. Also, saying they are going after the prosumer and corporate market makes it sound like they already own that market and things will be easier for them. If I'm an enterprise customer I know I would be thinking twice about investing any time/money into BB software, services or hardware until a clear direction has been set.

Marc_Paradise

This will not provide cash to BlackBerry.

This will pay for the purchase of outstanding shares from investors - BlackBerry received the money from those only during ipo.

Posted via CB10

M--Canuck

Great break down. Long live BlackBerry

Posted via CB10

theRock1975

Thanks Chris, don't you think this is a low ball offer from Fairfax since it's the first bid? The auction will last 6 weeks.

Their bid is actually at a 50% discount to the assets on book.

Posted via CB10

br14

The board accepted their offer. I can't see them offering more unless there is action by investors or unless another buyer makes an offer.

It's a steal at $9 so you never know.

YourMobileGuru

The board did accept the offer however there is a 'shop around' clause which allows them to entertain and even seek out higher buds. That doesn't mean that there will be any however.

Posted via CB10

thewad

This is good news if true. The media have been responsible for the slump in sales because they don't understand how good the Z10 is. How can they make criticism when they haven't persevered with a Z10. They need to use it for a month to be in a position to comment. Saying that it has less apps than the other 2 is not acceptable, even if true. Try using it for a spell media instead of commenting on something you don't understand. Good luck with the Z30 Blackberry I feel it will be even better.

Marc_Paradise

. Do you think the consumer will hold on to a phone for a month to make up his mind?

Or will they return it in a few days if they don't like it or can't figure it out, to make sure they're not saddled with it for a two or three year contract?

Posted via CB10

SupaDawg

I shouldn't have to use a device for a month to understand it. When I bought my 9700, I immediately loved it. The experience was simple compared to the sony I was coming from, and superior to other devices I had owned before.

This year I moved to android. Fell in love with the experience right after set up. Better ecosystem, larger community, and finally the apps I had always wanted.

I tried the z10 when I was out choosing what eventually was an HTC one. BB10 is not intuitive. App selection was worse than on the bbos device I was coming from, and the device felt cheap.

I was a blackberry supporter to the death, or thought I was. BB10 and the z10 were the end of that. I'll never go back. I hope the company survives, but I'll never carry one again.

br14

My 82 year Dad had no problem with his.

Never say never. They're still great devices. And the user experience is great - well worth the 10 minutes it takes to get familiar.

scottieblues

Blaming the media for BlackBerry's self inflicted wounds is just ridiculous. It's a complete and total cop out. So all of you Crackberry junkies can give that lame excuse a rest.

BlackBerry fell behind. Period. The BB10 devices bring NOTHING new to the table. Absolutely nothing. Developers have zero interest in the platform. That's not the media's fault either. BlackBerry has pathetic market share. Why would a dev waste valuable time and resources making apps for such an anemic userbase? And without the apps that people want, it doesn't make a damn what the OS is capable of. That's just reality.

So stop with the excuses. BlackBerry is dead. This firm WILL gut the company and sell it off in pieces. Investment companies are in the game to make money. Something the BlackBerry brand stopped doing a long, long time ago.

Phylth

I'm not happy to concede that I agree with everything Scottieblues is saying. Couple these factors with the fact that consumers are tied into two and three year commitments with new hardware, and no reasonable person will buy a new Blackberry device today.

danfrancisco

Excellent write-up, Chris. I always enjoy reading your articles. It would be great if you could expand your CB scope beyond simply being the "stock guy" and continue to write opinion and analysis articles on the state of BlackBerry as a business. The caliber of your quality writing would be greatly missed if you were to leave the CB team. Besides, what will Kevin do if he can no longer yell out "Ooh-Me-Ah-Staaaaaaahv-Skee!!!" during CB podcasts???

Xandrex_BSCF

as far as I know, Chris Umi writes for CrackBerry, but also for other blogs & newspapers. Among the Mobile Nations galaxy of course, but also in the Globe & Mail for instance.
Check his blog !

willm

+1 Thanks Chris. Hope you stick around and keep giving us business analysis, even if the lack of disclosures make them harder to follow and forecast.

msweet#CB

Fair analysis... nicely done... shareholders will sue... this was a deliberate action to screw the shareholders

luancuvi

+1 it's a rip off. Idiots or geniuses? First prevent adoption of BB10 by marketing overpriced handsets, then write inventory down right before this move by one of the main shareholders to by at bargain price... These guys are responsible of taking the price down and now acquire the company... Something smells rotten in Denmark

Winston Loh

Great detailed information. Thanks very much.

Posted via CB10

SK122387

No mention of the possibility Fairfax could sell parts of BlackBerry for profit?? Or will that be a separate post? I think that's what many of us here still fear.

igor10000

If they wanted to cut the company into pieces and sell, why would they lay off only 40 % of the staff, why not fire them all?

Xandrex_BSCF

Fairfax becomes the owner, but until the board changes, it is still the same board who decide. So for now, no concrete information about what will BlackBerry will become, except the quote in Chris' article.

coppola77

Hey...if going private is done properly, this can be a positive "tactical retreat." Sometimes pulling back, downsizing, and rethinking the game plan can pay off in the long run. If they can keep producing great products (BB10), this "boutique" company can grow as any small company would, and eventually go public again if it so desires. This is good news for consumers because it means BlackBerry stays as one operating piece, which means our phones keep working and improving. Good news.

webosdropout

"“We can deliver immediate value to shareholders, while we continue the execution of a long-term strategy in a private company with a focus on delivering superior and secure enterprise solutions to BlackBerry customers around the world.”

Sure sounds to me they are out of the consumer hardware business. So no more devices?

As far as "Prosumer", they want tablets and industry specific apps. Which are not written for BB10. I know I work for such company. We were issued iPhones and next year iPads. Can BB provide us with tablets and industry specific apps? They've lost us and will lose many more.

Xandrex_BSCF

yes and no.
The Enterprise solution covers servers (= software & services) as well as the end of the chain, meaning devices. Those devices can of course be iOS & Android, but BlackBerry 10 phones are still part of the chain since they provide more security.

It is as if carriers stopped selling unlocked phones, and started selling bundles "phones + SIM contract".
It will still be possible to buy BlackBerry phones for a normal person, but BlackBerry may stop investing in game developers & social network developers.

njrPTA9273

Thanks for the info, it helped clear up some concerns.

Posted via CB10 from my Z10 or PlayBook!

Alex_Hong

"I just hope the new owners kill off the acceptance of mediocrity that almost vaporized BlackBerry from existence."

+1

LinuxDais

Think it's a great move - time to refine direction, map out sustainability and hopefully profitability and awesome products to follow - love my BlackBerry smart phones!!

Posted via CB10 on Z10STL100-2/10.2.0.1371 ....Unlocked Runtime

diogoteixeira87

Chris, congratulations! The article is simple, objective and enlightening! Specially the last part. It tells everything that happened to this company in the last years:

"I just hope the new owners kill off the acceptance of mediocrity that almost vaporized BlackBerry from existence."

Wishing the best for BlackBerry and you guys of Crackberry too. We will still having some fun here BlackBerry going private or public.

Posted via CB10

iseeblackberry

Great article Chris!(Once again) Thanks to everyone at Mobile Nations on keeping our appetite for accurate information filled.

I like how you wrapped it up with..."I’m glad the employees will be able to go to work without having to read bad news stories in the paper every day on their morning commute. I’m glad the company will still exist and sell products that I actually want to use. I just hope the new owners kill off the acceptance of mediocrity that almost vaporized BlackBerry from existence."...

I couldn't agree more... The people at BlackBerry that I have had the pleasure to communicate and even meet, are to be commended on doing us all proud every day.

netviper

Chris, Why do you feel they won't buy it and just sell off the pieces?

Siya10

THE DEAL IS NOT DONE, COME DOWN!

Posted via CB10

Azensun

Thank you, Chris! In depth analysis in plain English! Privatization is a good move, and the best we can hope for right now. I hope they take advantage of this lifeline, assuming all goes through, and turn it all around. They've been given another chance, let's hope they do the right things and make good decisions.

Bowlegz

Hopefully Blackberry can now get it's act together, and mount a comeback in the mobile game!!

The Aficionado

This was probably one of the best realistic outcomes for BlackBerry, although I hoped and still hope mike lazaridis can come in with a competing offer.

The $9 per share just shows that the board didn't have any other offers on the table and they were determined to get sold

Adam zeis and others, do you really think BlackBerry will continue to make handsets or will they transition to a software and enterprise service company?

Posted via CB10

klebermt

What happens with management ? Heinz?

Posted via CB10

si001

I hope they chop off the top of the pyramid.

Anonymous2039

And go back to a dual CEO position? I don't think so.

Or were you just referring to Thorsten Heins?

--Q10 and Canadian all the way! Posted via CB10 on 10.2.0.1443. #IChooseBlackBerry10

Xandrex_BSCF

the top of the pyramid is the Board. And the Board did agree to Fairfax's offer. I doubt they'll be chopped off entirely.

Besides, Heins is only the CEO. His job is to execute what the Board decides, the way the board wants. And up until a few weeks ago, the Board still gave its entire confidence in TH.

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