Despite a meeting with Silver Lake, I don’t see BlackBerry going private

By Chris Umiastowski on 9 Aug 2013 09:31 am EDT
-
loading...
-
loading...
-
loading...

Late last night, Reuters published a story suggesting that BlackBerry’s board of directors may actually be opening up to the idea of going private. So in good CrackBerry form, I thought I should write up something that explains what it means and how it might change things for the company if it happens.

Let me start by saying this:  I don’t think BlackBerry is going private anytime soon. I don’t think it’s the right answer for them now. I’ll come back to this in a moment.

You might be wondering what “going private” means. It’s essentially the opposite of going public. Many CrackBerry Nation readers are probably familiar with one of the biggest “going public” transactions in the last couple of years: Facebook. Zuckerberg’s company was privately run for many years until they eventually sold shares to the public, and now the stock trades on the Nasdaq stock exchange (that’s where most tech stocks trade).

I don’t think BlackBerry is going private anytime soon. I don’t think it’s the right answer for them now

Back in 1998, Research In Motion went public too. Then came BlackBerry, then came CrackBerry, and now many years later ... the company is thinking about whether it makes sense to remain publicly listed.

There are rules public companies must abide by. One of the rules is to regularly publish financial results. If companies didn’t do this how would investors decide if they wanted to buy or sell shares?  So public companies have to celebrate their success and air their dirty laundry in public.  There are fewer secrets. When you’re going through a painful transition, as BlackBerry is, it might be nicer to avoid disclosing all of the nitty gritty details right?

To go private, somebody (or some group) needs to put out an offer to acquire all of the shares in a company. Then the offer needs to be accepted by a large enough percentage of shareholders. A company can’t take itself private. The company is not a shareholder of itself. The company is just an entity that others (shareholders) collectively own.

Usually, when a lot of money is needed, a private equity firm gets involved. If a company is fairly small, management might raise the money itself, but I doubt the brass at BlackBerry have an extra few billion dollars lying around. In this case, BlackBerry is said to have held talks with private equity giant, Silver Lake Partners. If the board of directors of BlackBerry and Silver Lake were to agree on an offer to go private, shareholders could decide whether or not to accept it. If they accept, they sell their shares to the buyers (usually at some premium), and BlackBerry stops trading on a stock exchange. They get to hide from the public for a while, or a long time, or forever.

Silver Lake took enterprise communications giant Avaya private back in 2007. Some of you might remember them better as the business telephone division of Lucent Technologies. Avaya was spun off from Lucent at the turn of the millennium. Things got tough, and Silver Lake moved in. Here we are 6 years later and Avaya is still private. I point this out to make it clear that going private doesn’t necessarily mean the company will return to the public markets anytime soon.

And this brings me to BlackBerry. The trouble that BlackBerry is facing is also trouble that needs to be fixed quite quickly if they are to survive as an independent mobile platform. If BlackBerry 10 can’t turn them around, or if a cross platform BBM launch doesn’t bring them back to the top of the mobile IM game sometime soon then we’re probably talking about a huge change in business focus.

Going private transactions take time to execute. If we look at Michael Dell, he’s been trying to take Dell private (with the backing of Silver Lake) for six months already. Shareholder’s haven’t even voted on it yet. Imagine if BlackBerry was to see the same thing happen?  By the time the company went private the opportunity to turn things around on the consumer front are potentially over.

Also, private companies don’t get as much media attention. This is good when you’re fixing things. But once things are fixed you actually want the attention. It’s healthy. So if BlackBerry was to turn things around on the consumer front, they need financial analysts and technology media people writing about it. Without quarterly financial results to spark news stories, this doesn’t happen as easily.

BlackBerry isn’t going private, or at least they are not going private to execute a turnaround

So here’s my thinking:   BlackBerry isn’t going private, or at least they are not going public to execute a turnaround. They don’t have enough time to do so out of he public view. If they do go private I think it means they’ve admitted the failure of Plan A, and they want to execute on a Plan B (whatever that is) out of public view.

Anyway, let’s remember that Reuters’ sources say that Silver Lake had a meeting with BlackBerry, but details of any transaction were not discussed. Let’s not read too much into this. My bet is the board of directors is just preparing for a range of possibilities. After all, that’s their job.

Topics: BBRY Editorial

Reader comments

Despite a meeting with Silver Lake, I don’t see BlackBerry going private

262 Comments

I do see this happening and soon. It will be interesting to see the next move.

Straight from the Z10 in my hands.

peter Misek on CNBC said now BB needs to go private and all it would take is a 30% premium to where it is today ir $13 bucks ...is he nuts or cute !

he always does , last Nov. 2013 at the point of Chris article with BB at $7 to buy BB , Misek was the BEAR then went bullish , now he is back at splitting and crapping the company ! take note BES 10 balance is securing his iPhone at Jefferies ! hey Misek get a Q10 and drop your clunky iP5

It might have something to do with him getting burned on the last earnings....once bitten, twice shy

You take the average price from the last three months,add 30% and the offer will be around$15.50.Prem could still be a partner,and hold his stake or increase it.

Watsa wants $40 .... he may take $20.00

Have the shorts cover and bid up the price to $40.00

Of course he wants 40. He'll I want 40. But at this point, 20 is looking like a bargain.

Posted via CB10

Thor himself said during general shareholders meeting that his focus is on transition of blackberry and he will not exhaust and distract management on takeover ventures.

That no one believes his own words but people believe some random story from Reuters by an anonymous source, lol.

Posted via CB10

... Thor failed to make BB10 on PB, whatever the reason is. Calling it a lie is inappropriate and do no match what Alex reminds us. More, it's old story now, let's move on.

Nobody cares about the stupid f ING PlayBook.. he already said why he didn't do it. HE SAID IT WORKED... but then in a nice way dumb cunt regards LIKE YOU would whine and bitch and moan like you are doing now. Boohoo. If you bought the PlayBook at full price that was your choice. Your product life cycle is over. People like u who only bought them at 80.00 that's your problem. Get over it... go bitch at apple for changing the charger port on the iPhone 5. now I have an alarm clock that I can't even use with it.. now I have to buy a new car charger... go f ING cry

Posted via CB10

More commentary from some village's idiot. Rather than BB building relationships through world class engagement with its customers and investors it would rather leave them hung out to dry. It's no small miracle that its share of the smartphone is also continues to atrophy at a rapid rate. The PlayBook is just one more data point in Heins and Co's failure to execute its mission.

Yes, BB10 was (at one time) scheduled to come to the PlayBook, and Thor did make the affirmative statement in that regard. However, business changed and he made the appropriate statement outlining the reasons for the change of plans. BlackBerry did not simply drop the issue and ignore it; rather the change in expectations was dealt with professionally. The mere fact that I won't have BB10 running slowly on my PlayBook does not mean I should treat all further utterances as misdirection and lies.
I can't see BlackBerry going private at this juncture. However, holding discussions with powerhouses such as Skadden, Arps, Slate, Meagher & Flom LLP and Silver Lake is certainly prudent if for no reason but to invite their suggestions and counsel. Its all about weighing alternatives, and making the best decision based on that exercise.

Yeah golly....can't figure out WHY anyone doubts Thorsten Heins' word...that's a head scratcher....say, how are you enjoying BB10 on your PlayBook...buttery-smooth is it?

Y'know, Thorsten probably got some over optimistic head of OS development telling him, "No problem, we can make it work on the Playbook!", and Thorsten's mistake was believing him. And for the record, I bought a Playbook knowing about Thorsten's BB10 promise before he retracted. I think all programmers need to be on deck to keep up with everyone else, no resources to fix a botched launch by old management.

..and those same OS guys had it running, but as the hardware isn't quite there...TH probably had to say if it's not going to be as smooth as a Z10...no go...and I don't blame him..I'd like to have it, but not at the cost of performance...it's current configuration is more than adequate...not missing that much by not having BB10 on it anyways...it would be different if PB OS was more akin to a BB7 OS...

There's a huge difference between technical delivery and business management. Holy crow, the PB is done, let it go.

Posted via CB10

BB should go to private otherwise shorts will kill this company. You might see $6 share price again in Sept 2013.

Chris, I applaud your interventions in these comments. Hopefully, this will be a regular thing and make the experience more rational, more like a conversation, and smarter.

Whoever said $6 .... is a crackhead. BlackBerry has almost $6 in cash. It's idiots like this that shame the world.

For stocks to go a lot lower and it be justified, BBRY would need to burn through that 3.1 billion it has in reserve. I really feel BBRY is undervalued at the present.

This won't happen ever! To find a buyer you'd need to be crazier than Thor and believe in a company like BBRY, private or not, they're not coming up with solutions to their problems

That could be the whole point why they're considering privatizing. If BlackBerry can't attain their unlofty goals (basic BBM X, underpowered flagship device) by next report, it will be another very dark day. I'm sure they want to avoid a repeat of what happened this past June.

Chris you too polite. You and I know the story is BS. Just another fake pump like third point rumors, lenovo takeover, china purchase...

Posted via CB10

A Texas company going to help a canadian company go private? You actually believe this nonsense?

Posted via CB10

This like what? The 25th pump and dump scam, the stock reflects that this news is BS. If Blackberry was serious to go private they would first have to let the shareholders know about, and since nothing official came out from Blackberry it's nothing but BS.

You know how exhausting it is for a company to make such a move? It's not easy and I sincerely doubt they need such distraction at such a critical point in their transition. If Blackberry was serious to go private, they would have done it when the two knucklehead CEOs were still in charge.

Wow, this comment is totally out to lunch.  First, there is a rich history of US companies getting involved with Canadian M&A.  Not debatable, nobody should have to explain this.  Second, companies who hold explorative talks with potential buyers / partners / whatever do not go around press releasing it.  Get real.

(No change to my view that the company isn't really going to go private, but the explanation here is nonsense)

Wow chris I can't believe you are this gullible. I'll help you since you so naive. In all the private equity firms that can help Blackberry privatize why did Reuters choose Silver Lake in their BS article? Maybe because Silver Lake was also the equity firm that is helping Dell to go private, so obviously they going to mention this BS with a familiar reference. But the reason Silver Lake was chosen for Dell buyout was because both Dell HQ and Silver Lake are located in Texas.

WHAT THE HELL DOES BLACKBERRY HAVE IN TEXAS? NOTHING, IT'S BULLSHIT! Wake up people! It would have to be a firm that is familiar with Canadian regulations. Not to mention, you and I know that Canadian government will also be involved so lets cut the bullshit and name what this actually is. Nothing but a pump article for a quick trade. This is not the first time this has happened.

Alex, you're out to lunch. The Texas connection means nothing. Silver lake is a tech buyout shop, focusing on value situations. Many US pvt equity shops buy Canadian companies (KKR - Shoppers, Bain Capital - Dollarama, Advent - Lululemon, Berkshire - Aritzia,). Silver Lake is the first call for large tech buyouts and that is why they were mentioned. CPP (an investor in Silver Lakes Funds) would likely co-invest or perhaps other deep pocketed pension funds. It may be unlikely but there is no shortage of private equity capital.

Posted via CB10

No american company will invest in Blackberry. Wake up, for USA this company is poison, look at the short interest. If there was interest there would have been bids LONG LONG time ago. Now they want this company to go bankrupt. If information is the most valuable commodity, it is in American national interest to make sure that information is kept by American companies. This is why you seeing more and more articles wanting this company to be taken apart. No one wants Blackberry to succeed that would be a pain for NSA.

Completely inaccurate. If Silver Lake thinks they can make money off this, they would do it. There is no conspiracy theory. There is no US interest in seeing the company fail. The shares are low because they are bleeding subs, losing money and generally failing to compete. Shorts like those types of companies. A private equity buyer might more easily restructure the cost base, shut down certain parts of the business (i.e. End QNX and move to Android), bring in new mgmt, sell assets, split the businesses, etc. It would not be operated the way it us today and it's very unlikely the current mgmt team would be kept in place. Firms like Silver Lake could bring in any CEO they like and would not have biases like the current board of directors do/did, placating to Lazaridis and Balsillie.

Posted via CB10

Talk about American paranoia to extreme. What have you been drinking lately? So many Canadian tech companies are acquired by US companies all the time. And to your point "American national interest to make sure that information is kept by American companies". Is that why Samsung is kicking Apple's butt left and right in the states now?

I'm worried you Canadians have realized that we Americans do indeed spend all our time and effort trying to destroy Canada.

Alex, I'm with you. It seems as if they may be trying to pump the stock up. This news leak and the mysterious recent stock spike that left a lot of analysts scratching their heads, leads me to your theory. Because we all can gather that the next quarter's report will be worst than the previous and the stock will surely plummet, so pump now and dump before the big plummet.

Based on historical trends with BBRY I'd guess market movers always move the stock up before the earnings report, then push it down again so they can short - having dumped their shares with a decent profit.

However, Prem Watsa - the largest shareholder at BlackBerry - has already taken a company private in order to avoid short action. So he's got form. (He also took legal action against certain hedge funds).

So while it's probably nothing but manipulation, there could be a grain of truth. Though there are plenty of other reasons why BlackBerry might talk with Silver Lake. What isn't so clear is why anyone else would know than the parties involved.

@br14 I totally agree that there could be a grain of truth to this. I have commented many times in the forums that I think BB's strategy was shifting months ago, before the earnings report. I think they knew how bad the Z10's were doing and knew it was going to be an up hill battle to make the company successful in the hardware side of their business. Thus they began shifting to a more service oriented plan and road map, vs hardware. I think they then began to think of a new end goal, which might include an acquisition and if there were no takers, it's possible that going private could be on the table.

But, your last sentence raises a good question, "Though there are plenty of other reasons why BlackBerry might talk with Silver Lake. What isn't so clear is why anyone else would know than the parties involved." This goes into Alex's theory. Are they just pumping or are they testing the waters to see if there are any suitors?

Umm, not to disagree with the meat of this thread, but BlackBerry's US corporate headquarters is in Dallas, TX (technically Irving). They also have design centers in Sunrise, FL; RTP, NC; Chicago, IL; and a bunch of SW folks scattered around the US. They have had a US presence since the whole NTP fiasco was fought on the Rocket Docket in Dallas. They also have a design office in Germany (near Dusseldorf I think).
People like ot say "BlackBerry is a Canadian Company" because it was founded in, and operates in, Canada; but keep in mind it is a global company, with employees in hundreds of countries around the world (as carrier support, mostly).

LOL....the US headquarters for BlackBerry is in Irving, genius. Take off your tin foil hat....there is no conspiracy

They have an office in USA they also have office in Europe. HEADQUARTERS in waterloo. Anyways enjoy holding the bag while all the smart traders sold at 10$, this will go back to 9$ next week. With this stock take whatever it gives you. Already analysts blew off the rumor not making any sense.

Posted via CB10

Honest question... what was your opinion when Apple was just about to file for Chapter 11, just before Microsoft bailed them out?

I can assure you that an American company would buy an AL-QAEDA company AND let them publicly behead puppies, kittens, and their own grandmothers if they thought it would mean a $.01 bump in the next earnings.
Wait wait wait...I'm sorry...I might have gone too far with an extreme example there...I meant a $.05 bump in earnings...yeah that would probably do it

Screw going private. I need to know what's going on in order to continue supporting them; otherwise the relationship would be over.

They'd still press release stuff they felt like releasing.  They'd still be able to engage with customers (social networking, etc).  They'd still be able to do whatever they wanted.  They just wouldn't be obligated to release financial stuff, and there would be less stories written about them.  

One of the most successful private companies in the UK is John Lewis Partnership, and another is the Co-op. Both have excellent customer relations.

Posted via CB10

S. C. Johnson & Son is a great American brand. And yes a private company that continuously innovates. Private companies should not be frowned upon.

It would likely result in even less transparency compared to present day because they wouldn't be accountable to the public. Unless the new owners are customer-focused, this could be very concerning for BlackBerry faithful.

I think they already know Plan A is over and it is off to Plan B now. Z30 will be last gasp of Plan A but they need to move on to Plan B now because of the time constraints. They can't afford to burn though cash pursuing Plan A for very long. Plan B has to start executing in a timely fashion.

I don't see how this would tamp out the flames of "BlackBerry is going bankrupt!!!111" - if the last 3 quarters of earnings haven't done it when they've been adding to their cash position, I don't see going private (and the lack of transparency that entails) helping either. Being acquired by a larger / better brand, or being split into a solvent company supporting the NOC and a questionable company producing handsets, might. I don't know. I had thought recently there was news of HTC looking for a buyer as well, and honestly I think it would be best for BlackBerry and HTC to form a *merger* where HTC runs the Consumer Handset division (with BBM / SWS on Android) and BlackBerry runs the NOC + Enterprise Handset division (on BB10). No one in Enterprise is going to care about the 'app gap', and they will have the Player in case they really need something. Inking a deal with HTC for exclusivity on certain BBM / SWS features, along with a cash injection of a Billion or two, would certainly help return the company to "BlackBerry Means Business" mantra.

Let's see how many news agencies and tech blogs talk about this yet they didn't mention yesterday's ATO with the DoD.

+1

I was waiting for the fireworks and celebrations too. Never seems to happen on a positive note for BlackBerry. Either way, I shared out the positive news within my little social circle :)

Sparky, please go back and reread the Did post. It says 10,000 by this fall and 30,000 devices by the end of 2013. No where does it say 3 years.

Posted via CB10

Indeed. Both within other US gov entities, state and municipal agencies, other countries' agencies, and other security minded companies who say "well, if its good enough for the Pentagon, it's certainly good enough for me"

Personally I think Dell and BlackBerry would be smart to team up in one way or another. Both have strength in the enterprise space and could leverage that better together.

Posted via CB10

Dell laptops with QNX perhaps?

Or Dell make the screens and keyboards and BlackBerry supply to processing engines? (see Ubuntu Edge for where things are going).

I think that's exactly it. It's Silver Lake exploring partnership options between Dell and BlackBerry once they can take Dell private. The meeting is not about BlackBerry board exploring going private at all.

Dell and BlackBerry? I don't recall any cases where two struggling companies merged into one robust company.

BlackBerry would be better off to be bought by a strong company that can leverage their secure backbone, patents, and systems. Possibly continue with very secure and pricy handsets, but not expect to gain mass consumer market in the US - at least until there is a bigger security scare. Oracle, Cusco, IBM, MS, even At&T or Verizon. Then there is Google and Samsung too.

The BlackBerry vision of being QNX computing platform in the future is possible but bigger players, with Linux (another Unix derivative like QNX) see that vision too. No one expects the iOS or Android to be able to be the next overall computing platform. So that does open the door for Linux, QNX or the Windows derivative to be the next great thing. For BlackBerry to to win that race they will have to execute a LOT FASTER than they have in the past. This is where a partner could make a big difference.

Posted via CB10

Good comments. Not sure about how much speed is a factor, but it is very true that the door is wide open regarding the next computing platform. IOS is too limited in its current form (i.e. in and out paradigm), while Android is focused on Google advertising and is very fragmented. Windows mobile has some strengths, but is just too bloated. There is an opportunity for the first large company to get this right.

My theory is that Blackberry intended the A10 to be the first mobile computing platform for all our computing needs. However, over the last few months they realized it is not quite ready yet. It requires a lot of hard-core coding and development! So instead, to tie things over and to keep the fans happy, they are releasing the Z30 which is a souped up Z10 with better functionality and more capability (it is sort-of an interm step).

Two struggling companies can merge into one robust company if their vision and strengths are complimentary. How about SoundJam during Napster's peak (RealPlayer/Windows Media Player/etc.) and Apple during the Wintel heyday? It's not a strech to say both were then struggling at least as much as BlackBerry and Dell are today. But fast forward and we now know that SoundJam + Apple = iTunes + iPod and everything that followed (i.e. a real turning point in Apple's fortunes). I'm not saying Dell and BlackBerry would definitley make the best partnership but I also wouldn't close my mind to the possibility that something great could come of it.

Is it possible that with their new BES offerings for cross platform MDM, as well as potential revenue on the
BBM front, that they go private now while the stock is cheap? Maybe wild optimism on my part, but IMO profit from licensing is where it's at. At $50/device/yr for CALs they may make as much if not more profit from each Android/IOS device as Samsung, Apple and others do over the device's lifetime.

Bb10 will succeed. It is a great platform. Wish my Window computers worked like my z10 does. Anyhow, it seems the shorts won't cut BlackBerry any slack and no matter what BlackBerry tries, the media dumps on them most unfairly I will add. So I can see management looking at options in the event the stock tanks. There still is a massive corporate base that is still using BlackBerry legacy devices. This sector has not even begun to switch over to bb10 devices. And they will. They already use BES and BB10 makes the perfect corporate device. BlackBerry could run privately no problem in my opinion.

Where's my FULL BRIDGE Mr. Heins? Please return it!

Doesn't Prem Watsa have form on taking a corporation private when it is under attack from short sellers?

As you say, the reduction in publicity might be an issue, but if the company is changing direction (i.e. giving up on ever being a major force in hardware), it might make sense since continuing low sales numbers is going to reduce overall confidence - and especially from enterprise.

My take is that as the premium smartphone market has become saturated in developed nations the opportunity for the kind of huge markups and profits made by RIM, Apple and Google over the past 10 years is fading.

I see BlackBerry as a niche premium device player in a market dominated by low cost Android manufacturers. At least until Google starts charging for Android. In those circumstances the PR from being public isn't such a benefit.

And anyway, should they take BlackBerry private, they could always go public again once the turnaround is complete.

My understanding is that Google has five year deals in place with Samsung etc. After that who knows?

Not Samsung that's for sure. Hence Tizen. More a negotiating position with Google than an operating system.

So basically Google handed out Android like it was trying to attract dope fiends, get them hooked, then charge them. If that's what happened, then good for Google. What a way to do business.

Just like Apple with AT&T, they succeeded because one major partner was watching its market share plummet and was therefore willing to sell its soul.

Samsung was losing phone market share until Android came along.

But don't think for one minute they enjoy being dependent on Google. I could even see them licensing BlackBerry 10. Samsung has traditionally supported multiple OS.

You're implying that Samsung find selling 75.6 million phones in the last quarter a hardship that they must free themselves from? Yeah I could understand why they want out of that relationship really fast.

And what happens when, Samsung having invested millions in adding software to Android, Google decides in 2014 to charge $20 per device in license fees just as the smartphone market becomes even more competitive than it is now.

If Samsung was so happy with Android - why did they create Tizen? Google Tizen and see what Samsung are saying.

Don't forget, it's taken all of 3 or 4 years to get Android from zero to where it is now.

Don't assume it couldn't go back to zero just as quickly. Or haven't you been watching BlackBerry?

The only deal Google has regarding keeping Android open was made with Chinese regulators who wanted a guarantee that Android would remain open for at least 5 years after Google bought Motorola.

The only deal you're aware of anyway.

But why only commit to 5 years? If Google truly believe Android should be open, why not 50 years?

The fact they've only agreed to 5 years suggests they have similar deals with everyone else using Android. And if they truly wanted to keep Android open they'd create a foundation or similar to manage the code.

Given how well the Symbian Foundation ran Symbian in the late 2000s (into the ground) I just don't think Google trusts a foundation structure to do a good job.

I agree with Alex Keb's line of thinking. This has at least two effects:
1. Give bad publicity to Blackberry (I expect analyst notes, articles in WSJ, Forbes and others valuing Blackberry and proclaiming in bold that Blackberry's Plan A failed! now "Plan B, to go private - will there be any buyers?")

2. Will make the stock more volatile in the coming weeks and months - which is good for option market

Personally, as a stockholder of $BBRY, this is the last thing I want. IMO, $BBRY should put out a note immediately asking the markets not to read too much into this news.

Yup. The fire sale would be on and the stock markets would most likely stop trades of the stock. Barn burner!

Whatever management does I hope it's best for the company in the long run and not just the investors. I don't want to see BlackBerry go under, I have way too many friends and colleagues who would love to say "I told you so". I stand 100% behind my Z10 and PlayBook.

I flick all my words on the Links amazing Z10

I know for a fact that Silver Lake is doing everything in its power to try to take Avaya public as soon as they can. They have been trying to for a few years, but it simply isn't attractive enough right now as is to do it. It is driving many financial decisions in the company. I could see adding BlackBerry and Avaya/Nortel patents, and products into a common company as a huge value proposition. Avaya could look to migrate their PBX, router and switches over to BB10 as the backend, and add in the BB10 mobile security solution as a value add for smartphones in the government sector. Avaya is currently big into pushing iPhone and Android, but it would be easy for them to push their own solution in addition. I'm simply coming to the realization that BlackBerry doesn't have the scale or the resources to compete as a stand alone entity anymore and being combined with another company and patent portfolio may be the only way for them to survive long into the future, even if the name on the device changes to something else.

I certainly believe SL wants to take Avaya public again.  But the PBX market is a tough one, and with the troubles in Europe, and Avaya's exposure via Tenovis and their pre-existing base, the IPO window is probably closed.  Tough game.  

Chris, it should read "private" instead of "public" in the second sentence of the next-to-last paragraph!

BlackBerry should instead of collaboration/negotiation with competitors (Silver Lake Partners are Microsoft go-between) concentrate on competition with its rivals. BlackBerry SHOULD:

1) Increase sales/gain the market share.
2) Use part of its cash to repurchase shares.
3) Adopt and EXECUTE effective Anti-takeover strategy.

Not sure BlackBerry management doing this right now..

Peter Misek just came on MSNBC and said that they would have to offer a minimum of a 30 percent premium in a privatization move.

He said the other option is breaking the business in 2 and selling the hand held unit to Microsoft, or Amazon and in that case, the value of the business is in the 15-25 dollars per share range.

Posted via CB10

Why would MSFT want to buy BB's hardware operations? a) they already have Nokia's hardware operations (i which they got to wag the dog of a $40 billion company with a measly $1 billion tail), and after the Surface they're probably pretty wary of going all-out in hardware.

I believe that they should be seeking a buyout and a name change. The blackberry brand is tainted. Consumers believe that it is a lame business oriented phone I know that from personal experience.

Posted via CB10

"I know that from personal experience"

And the rest of us posting on here don't have BlackBerrys? In many respects BlackBerry is more advanced than the competition. There's not much function of any real value they don't have on BB10 compared to the competition.

I totally agree about the name. Keeping the name BlackBerry was a bad idea. At least here in the states. too many negative connotations.

I agree on the name change. Maybe we should start a thread on this? Blackberry is well known, but tainted. A new cool name could be helpful. ....... Hmmmm. Tough call.

Leave it BlackBerry, I think as time goes by more BlackBerry owners will exist. It is moving like a small snowball but the avalanche is going to follow. I have personally led four people to switch to BlackBerry and all I ever have to say is "oh yeah? well watch this"
No one really knows about BlackBerry, even months after the release the lack of marketing to me is what is killing/hurting BlackBerry. I want to see cool BlackBerry commercials. A stand in the Best Buy. Something more then the nothing they have now. Heck, a commercial on MTV with a crazy new song playing in the background while kids trade pictures or some crap with the NFC it doesn't even need to be groundbreaking, just simple enough to be "cool" Simple sells to the messes. Not everyone needs a piece of machinery in their hands. Some people just want "cool" I think both are in BlackBerry with the new Z10 but heck not one person at work had a clue what a "Z10" was until they saw mine. And all the managers have BlackBerry phones..

Very good write up Chris. Yes taking a company private is not something that can be done overnight and isn't a simple process at all! So many ifs and buts with complications adding on if the present offerors suddenly are challenged by someone else which in any event would be good for the shareholders. But the fundamental need to take BBRY private needs to be understood.

Posted via CB10

Another reason to go private is to manage the negative PR.

BlackBerry is being decimated in the media each quarter, as the short sellers force the price back down. Take last quarter, when the results were more or less bang on guidance. Yet most people thought Thorsten Heins did a lousy job - even though he predicted a poor quarter.

And that's not great when you're trying to sell BES10 and BlackBerry 10 devices to nervous enterprise managers.

If they could organize a couple of years of stable media coverage (even much reduced), it might help the sales guys trying to close on BES10.

They have the best MDM package on the market but I don't see them having great success - yet.

He didn't say he was going to have a bad quarter. He needs to start being more straight up. Last quarter he was implying sales on the bb10 were solid. Of course when you're lying about it wall streets gonna eat you up when the truth comes out. This whole going private thing seems like it was there plan all along. If they go private there done there gonna lose support from all there long time investors that lost so much money like myself.

Posted via CB10

Actually he did. Or rather he predicted no profit. And but for the Venezuela adjustment they'd have broken even. So pretty well bang on guidance.

You really have to ignore what market commentators say and listen to the actual guidance. Market commentators are often trying to manipulate the price - in the nicest possible way (i.e. to avoid ending up in jail).

There are trends with BBRY that are clear for all to see every quarter.

And if they go private it won't be forever. But if you're holding BBRY thinking it's going back to $100 you're sadly mistaken. IMHO the smartphone market is approaching maturity. Going forward there won't be the amazing profits and margins we've seen in the past. Newer markets have too much price sensitivity for that.

I don't recall him predicting anything about the quarter. If he did, we wouldn't have had the nosedive in June.

I take it you didn't listen to the earnings call. (I do - every quarter). And at the moment the price drops after every earnings call. It was just slightly more exaggerated last call.

He predicted high launch costs during the previous quarter that would mean the company would be unlikely to declare profits. He was right. As usual.

And for the coming quarter he's guided there will be a loss. I'm sure he'll be right again.

But as we approach the results announcements, there will be all kinds of news about take overs, going private, increased sales etc, and bullish analysts, as market players push the price up ready to be shorted down. And as long as the unenlightened buy and sell on emotion, the short sellers will have their pay day.

If you want to play buy now but be sure and sell before the next earnings call.

The gist is that they do not have to report to their shareholders or list their financial statements in public
. The shares presumably would be held by a smaller friendly group of owners so they could have more time and liberty to execute their strategy. On the other hand the shareholders elect the board of directors so they could clean house and out their own directors in place.

Posted via CB10

Great article, as always, Chris... Obviously by looking at the volume of comments you have stirred up some good dialogue. Chris = Voice of Reason... balanced and appreciated...

Silver Lake consults with me quite a bit (UK). Don't read too much into this - at the moment. BlackBerry have talked to Met Life also. They're doing what they should - looking into options.

I've been hearing rumblings, for a while, as have been reported here and elsewhere (thanks for your work Chris U).

BlackBerry has a way to go, before they consider their endeavour (in the consumer market) as a failure - if that ever even happens - and have to consider a plan B. That said, strategies take time. So BlackBerry are right to think now. As said, the Dell buyout issue has been going on for a long time.

BlackBerry have a while yet, to prove their mettle and sell like hell.

It's not all doom and gloom... yet.

Posted via CB10 on my BlackBerry Q10

We need a person with deep pockets to put a short squeeze into play not being taken private. Yes, BlackBerry is not in the best of shape but it is nowhere near as bad as the shorts portray it. People need to hear of Blackberry's successes not just the gloom and doom of the short cronies. Private companies don't get the press that advertises your products and puts you in the forefront.

Posted via CB10

It makes sense to go private but it will be tough to find a buyer. The vibe I get from this news is that Prem has a lot of sway on the board. He has the most incentive to salvage his investment and going private may do that.

Posted via CB10

..let's face it, there is no free stock market any more. it is heavily manipulated, as well as the public opinion..BB10 slow start was in many ways attributed to a massive anti-marketing done by the shorters or the "analysts" who live off their tits.. who would want to buy a phone being bombarded daily with the "news" that the company is gonna die in a few month.. but put the Apple logo on the same phone and it will suddenly become a HUGE success that all the analysts will be lining up to praise.. what a game!! conclusion, in this "free market" you don't even have to have a great product, just a "brand" and buy enough brainwashing support from the press.. unfortunately at this moment BB has neither..

Rather than the board having discussions on going private it should be having discussions to replace Heins. He clearly is not the man for the job he was given.

Couldn't they do themselves a favour and provide additional guidance if the price climbs further.

Can't imagine they want a repeat of the last quarter when they announce losses in September. Odd how these bullish rumours always start with a couple of months to go to earnings calls.

Does this feel like this was the plan the whole time to anyone else? Stocks were at $16.00 just over a month ago. BlackBerry starts implying sales are going well for the company stock rises then when the report comes out stock drops $5? After that it just keeps going down. Now they wanna go private. Seems like this is what they wanted all along. If BlackBerry goes private I can't see all there long time investors who are going to lose a lot of money still supporting them. I know. I would feel betrayed let down and played

Posted via CB10

Thanks for your article Chris! I was looking forward to hearing your opinion.

I agree it's not the best idea, but I really, really like that the BOD is considering some major changes. The status quo is barely acceptable and some big changes could unleash some huge up-side.

My vote is for licensing BB10 to Samsung and others (even at low cost). As well, I'd like to see some partnerships with organizations like Sony.

And here's the thing: In the West (including Japan and probably S Korea), on security as goes the USA, goes everyone else in government. For instance, the Canadian gov't relies on FIPS 140-2 certifications for a lot of stuff, and that's an American standard.

Investors buy companies to make money. The can do so by managing a mismanaged company better or by splitting it off and selling the lucrative pieces. I am not sure anyone outside of the industry could claim they could manage a complex hardware software company better than it is (albeit poorly- I dare say it's better outsiders could - like when homer Simpson designs the perfect car) so that leaves chopping it up and selling qnx, tat, patents etc. All imply no more blackberry. I think a takeover or partnership is the most probable outcome.

Posted via CB10

Chris - I think one scenario that could possibly work to make it feasible for them to go private would be a simultaneous sale of their hardware business (to say Lenovo). If BBRY were to sell its $9 billion a year revenue hardware business for say $1.5 billion, perhaps Silverlake would be willing to take a smaller, profitable and cash-rich company private.

So basically the the choice to go public would be to hide how badly things really are at the company right now! And if you haven't been paying attention BB10 as good as it is...its not turning things around! BlackBerry IS falling into fourth place behind Windows Phones, what used to be speculation according to you guys here at Crackberry is now becoming reality.

With all due respect, but I swear you guys at Crackberry , in spite of insightful articles and some eye opening remarks, you seem to be addicted to that first ingredient mentioned in your moniker...crack. Its like you have deliberately crazy glued your eyes,ears and mouths shut then taped your for forehead to your asses and dropped your IQ a few percentile! This company is in deep shit, no amount of fake sunshine and laughter will fix that. The only constant here is increasingly BlackBerry customers being abandoned and fucked over!

I try to stay positive and loyal, but the other day I went out and saw a lady using a Q10. She saw the logo on my Z10 and asked me what model this was!?!? And this is not the first time this has happened!! This is messed up when even other BlackBerry users don't have the faintest idea about other products from the same company! Do you remember the last time you saw the Z10 advertised anywhere? Yeah...me neither!

The Z10 has already faded from most consumer's minds...after what 7 months since its launch? Did I just spend $600 dollars for a dud...a phone that is destined to become the next PlayBook, no matter how actually good it is? Jesus...its been months since I've even seen a goddamn poster of this fucking phone!

BB10, the Z10, Q10 and Q5 (and possibly the A10, or Z30 or whatever) are a great combo. A great OS, excellent features, great UI, well designed devices, true multitasking functions, very productive, a good ecosystem, personally I don't care too much about apps besides I have more than enough to suit my needs...that is all fine and good! But the people at the top of this company are a bunch of fucktards! If we don't get rid of these shitheads and soon, and replace them with individuals that actually care for this company and its employees and have a vision and a strategy to move forward, then pretty soon BlackBerry will be nothing but the fruit I buy at my local supermarket!

Posted via CB10

-1

Calm down. Taking things too personally aren't you. To think you have BlackBerry confused with a sports team. Do you have the same "passion" with everything product you use? Even touthpaste??

No I am not as passionate about my toothpaste, because I haven't put as much money in my toothpaste as I have in BlackBerry products! Between the full price I paid last year for the Curve 9360, 64GB PlayBook (which I thankfully got for$199 Canadian in a special deal), and the full price Z10 I got in April, I spent over a $1000 dollars...It was my choice, because I like BlackBerry and their products, but I have a limited income as well as spending money and maybe for you that is not a lot of money, but for me it is!

When as a consumer you start being increasingly let down, I earned my rant and my rage! What they did with the PlayBook was enough of a nutshot, and I tried to be understanding as they explained the business and technical reasons behind the decision mothballing a product they never supported or believed in, in the first place...

But now to see all these brain dead moves, stumbled product launch and the lack of any coherent and substantive product advertising...and the Z10 quickly dying a la the PlayBook...you damn right I'm pissed!

Posted via CB10

You're going to end up having a stroke. In the grand scheme of things 1,000 is nothing. Compare that to the mass shootings in the USA. If you were angrier about those tragic incidences it'd be a different story, but here we're talking about replaceable objects.

Yeah, in the grand scheme of things $ 1000 dollars is nothing, but in the small scale of things, it is quite a bit of money for someone like me, put in the perspective of a BlackBerry user which is why I was venting. Lucky you that for you $1000 dollars is nothing...

I'm concerned about mass shootings and issues of gun control and ownership and other such issues...and when I comment on that I go to websites or blogs that are dedicated to such debates or discussions.

I come to Crackberry, as a BlackBerry user, to discuss things related directly or indirectly with this company, its products and the community that accompanies it. I get to exchange some ideas, joke, be immature and occasionally rant and rave...

So please oh exalted one...stop preaching to me...I'm here discussing inanimate objects, not trying to solve world hunger or save the Amazon rainforest...

Posted via CB10

Please don't misquote me. I consider myself to be a middle class person. I wrote that in the grand scheme of things $1,000 is nothing.

I know that we're all passionate about BlackBerry. I know that you care quite a bit since you're quite vocal on the CB blogs. I'm not preaching at anyone when I say hanging on to a decision with such vitriol / hatred to something inanimate is just not helpful or healthy. There's just so much to be thankful for.

I respect and agree with a lot of things said in these blogs, but we can all agree to disagree. Life, for most of us, goes on.

BB has done a world class job of pissing off early adopters of recent launched product. No wonder word of mouth isn't working to build share.

I'm trying to work out how you can say this "the people at the top of this company are a bunch of fucktards!" after saying "BB10, the Z10, Q10 and Q5 (and possibly the A10, or Z30 or whatever) are a great combo. A great OS, excellent features, great UI, well designed devices, true multitasking functions, very productive, a good ecosystem".

If you want to see ads for BlackBerry travel to Times Square in New York.

I, like most of humanity, don't live in Time Square, and if that is where you have to travel to see BlackBerry advertising, then that is pathetic...

And yes I can say that the people at the top of BlackBerry are a bunch of fucktards, BB10 and the accompanying devices are not the work of managers but that of the rank and file employees of BlackBerry, you know the ones that keep loosing their jobs...

For heaven's sake, George W. Bush has more life in him that Thorsten Heins...who has the vitality of a mummy...That guy doesn't inspire me to buy BlackBerry products, when I see him, I'm thinking I gotta go to the bathroom again...

Posted via CB10

Times Square must be about the most expensive ad real estate in the world. It demonstrates BlackBerrys intent marketing wise. They spend money where it is effective - and can't afford to blanket the globe in billboards as do Apple and Samsung.

Thorsten Heins is an extremely bright guy with a PhD in a Physics discipline.

I appreciate there are large segments of humanity that don't want to listen to him because it makes their brains hurt, but for those of us that aren't impressed by bright shining things, Heins talks a lot of sense.

Don't make the mistake of believing market commentators who are trying to manipulate how you feel in order to get you to drop support for BlackBerry or sell shares. If you think the phones are ok then stick with the company. If you don't then go buy an iPhone. It's a nice shiny device and Apple can buy enough media that their PR is pretty well always great.

By the way the guys at the top are generally involved in all aspects of product development. They have to approve the millions of dollars in capital budget that is invested in new devices so they need to know. Hence a Physics PhD as CEO.

The only shinning thing that attracts my attention is the red light flashing on my Z10...and I don't give shit on Apple or Samsung for that matter. Its BlackBerry products I own not theirs.

I also don't give a rat's ass about financial analysts or commentators whose value for me floats between a coackroach and the turd I left this morning in the toilette bowl!

But what I do pay attention to is my experience as a customer, and as limited as it might be, right now my spidey senses tell me that BlackBerry is stepping into a pile of dung and they are doing it with their eyes wide open...

I don't think I'm willing to take another couple of nushots like the whole PlayBook episode...And if this continues, soon I'll do my voting with my wallet...even with the scarce financial resources at my disposal...

Posted via CB10

I'm as disappointed as anyone with the Playbook fiasco. But the truth is I'd be happy with the device as it is if they could just update the browser. It's ok but nowhere near as fast as BB10.

Given time (say a year) I think BB10 will become way better than the competition. At the moment it is technically better, but still lacks some features consumers want.

"Thorsten Heins is an extremely bright guy with a PhD in a Physics discipline."

So?

He sucks donkey balls as BlackBerry CEO! His PhD might as well stand for Pimpin' hoes Degree for all its worth! Its like me saying I got a degree in interpretive dance and I can do mean jazz hands...I think that qualifies me to be a brain surgeon...

Posted via CB10

"He sucks donkey balls as BlackBerry CEO!"

Eloquently put, but I'm not sure of the basis for your statement. He predicted a moderate last quarter. He was right. He probably should have published additional guidance when he saw the market price climbing, but he perhaps didn't want to jeopardize the marketing effort too soon.

And I'd like to be bright enough to get a Physics PhD, but I'm not part of the small handful of people on the planet capable of achieving such a goal. That makes him bright enough to run BlackBerry. He's had 18 months to turn around a car crash of a company. He needs another couple of years before we judge his performance.

I sure hope you are right! Despite my ranting and raving I DON'T want to see BlackBerry fail!

Posted via CB10

What the blazes does having a PhD in Physics have to do with running your own life or a business? With each passing day it becomes more apparent that Heins & Co and Stymiest & Co are failing at engaging customers and investors? The PlayBook being another data point in the sequence of events.

Q10 TV commercials is been on CNBC and Bloomberg for thé past 3 weeks, using functionality of the phone commercials chill

We are just getting start DoD has just approved the phone

Posted via CB10

Yeah, I don't have CNBC in my cable package and I don't watch CNBC ...as most people don't either...The average TV viewer, despite us wanting to believe otherwise, spends his or her time watching "Honey Boo Boo" on TLC and "Keeping Up With The Kardashians" on E! that is where you need to advertise!

Posted via CB10

"..TV commercials is been on CNBC and Bloomberg.."

Quite interesting. Both media (CNBC and Bloomberg) have been bashing hard Blackberry in their news for some time.

I have also noticed Blackberry ads on CNET which is doing exactly the same.

How can Blackberry let earn our (shareholders) money media which have already made a fortune on spreading negative news on Blackberry?

Chris,

The combination of Dell and BlackBerry, with the help of Silver Lake, would make an interesting global play for mobile computing I would think. Instead of taking Dell private as an old school server/PC company it would be very interesting to have BlackBerry in the mix and designing a new, bigger company which has global presence on two fronts, and not just one each. 1+1=2.5 sort of thing.

This idea crossed my mind too. Dell has been trying to get into a mobile device market for quite a long time without success, and their PC biz hit the dead end.
OTOH, Dell and Silver Lake has been talking for something like 2 years (or more). It's only recently (Chris said 6 months or so) when it became a public knowledge when Michael Dell ran out of patience and talked about it publicly. Then, I believe he was stalled by shareholders. BBRY does not have too much time in their hand to go through this, hence going private is the least possibility under the current situation, in my opinion. But you never know, they do have money in the bank to mobilize this idea.

As a shareholder, not sure I'd like to see BlackBerry go private, but as a BlackBerry user, this would be the best thing for the company. Private ownership could put forth a comprehensive restructuring of the company that the current board and management team are unwilling/unable to do. The company in its current state is failing and from the looks of the A10 specs, its not going to change anytime soon. As I've referenced on several other posts, their biggest challenge is their image. Carriers aren't supporting them (little or no marketing and sales staff prefer to sell samsung or iphone). Consumers haven't gotten past the "crappy old keyboard" image which is a reflection of the marketing departments failure. Their TV ads suck (their 30 second Z10 commercial features about 5 seconds of the phone). The Z10/Q10 launch was botched - they had tremendous build-up to the superbowl and released one of the dumbest ads I've ever seen and then delayed the U.S. Z10 launch by a couple months and more for the Q10. They did a fantastic job of destroying their own momentum. Again, there was very little marketing support upon launch and what marketing they did have sucked. Key apps are still missing and there's no indication of that changing. And please don't give me the 'I don't care about [insert app here] anyways argument. A lot of people do care about apps not on BlackBerry and they won't be giving them up so that they can get a BlackBerry. The sales numbers are horrible. Under 5 million BB10 devices have been sold thus far. People often refer to blackberry having a user base of 70 million and can't understand why developers aren't supporting it. That's why. Under 5 million BB10's have been sold. And here's the real kicker. Phones are mainly sold on 2 or 3 year contracts. Two years ago BlackBerry was selling over 12 million units per quarter. Last quarter they sold less than 7 million. There's a reason BlackBerry executives announced that they would no longer be providing the user base number - it's about to fall off a cliff. And this leads to the next kicker. Their cash balance of $3 billion. That's about drop. The most profitable part of BlackBerry is the service revenue - about $3.5 billion and has very little costs (about 20%). That works out of be about $3 billion of cash flow to the company that's quickly going to disappear.

I do believe there are a few bright spots. BES10 appears to be promising, but it is still buggy and tolerance for that is minimal. If they can't get this right, then it's almost certain they are doomed. The BB10 phones, while not perfect, are pretty darn good. I love my Z10, but it lacks apps and some common sense features. I believe some of these are going to be addressed in 10.2, but it's taking too long.

I say all this because unless something changes dramatically, BlackBerry unfortunately is doomed. They need to regain positive momentum and I believe private ownership could do that.

There's such good perspectives like yours hidden deep in the blog post comments. Please start a thread in the forums with this.

Advertising to me is the biggest failure so far.

Two days ago my better half went to dinner. She tried a small portion of a dish, liked it so much, she had three small portions. It was apparently really good. The meat turned out to be veal. She hates veal.

My point is that you can dress something up well enough and sell it regardless of what it is. I liked the Superbowl ad, and I was looking forward to seeing them build on that, and now we have garbage for ads; as you pointed out, commercials that show 5 seconds of the device. As you are a shareholder I'd say you should be asking for Frank's departure.

Bruvvapete - it goes well beyond just advertising. I actually think the lack of carrier support is what's hurting most. If unit sales were there in Q1/Q2, app developers would be more inclined to contribute. Now with the PlayBook cancellation, many are feeling burned and resent blackberry.

Advertising would help consumers request/choose BlackBerry instead of the alternatives, but the fact that if you go into to any at&t or Verizon store and their first recommendation is going to be an iPhone or Android is very damaging and hard to overcome. Add in the fact that 10.1 hasn't rolled out/seriously delayed and you have an almost why bother picture. BlackBerry execs should be pissed at carriers.

Posted via CB10

I don't think that finding a buyer at current price levels is a problem. BlackBerry's book value is over 18$/share.

$18 book value assumes $3 billion of cash and several billion in questionable intangible assets. Book values for tech companies aren't very reliable as they're very subjective.

Posted via CB10

Board member are looking at EVERY option to protect THEIR investment in this company.

At this point the "PLAN" that BB10 would be the fix for all of their problems is not materializing. I don't believe that going private would be to allow the company to operate more "quietly" but to allow for some major changes to the focus of the company - most likely getting out of the consumer market completely.

The question as to private vs public at this stage has NOTHING to do with turnaround plans and perceptions of success or failure. The answer will come from these questions:

1. Who OWNS/HOLDS the most BlackBerry shares?
2. At what value did they get in?
3. How long have they held those shares?
4. Can Silverlake deliver a higher return on that value both at the time of a deal close and post transaction?

Should BlackBerry go private it is safe to assume that the consumer aspects of the company will disappear altogether. Once private (especially through Private Equity backed transaction) BlackBerry's valuable patents and intellectual assets will likely be sold or licensed to the highest bidder. P/E guys have ZERO romantic attachment to the companies they buy & sell. Furthermore, success is defined by return on investment within SHORT time frames. P/E is not where great companies are built or turned around. It is where they are dismembered!!

Post courtesy of my Q10 on the EVIL blue network.....

I agree that Blackberry will not go private soon. I don't think it will ever happen. BlackBerry still sale 6 to 7 millions device a quarter and almost 3 billions in the bank and zero debt. How can a company with zero debt, 3 billions in the bank and still sold 6 to 7 million devices per quarter is going out of business? It is possible, but unlikely. BlackBerry has the best BB10 software and the most secure device on the planet. The only problem with Blackberry now is the business execution. They have to spend more money to educate the public about why their devices are difference than their competitors. Tell the public what are the best features that Blackberry has the competitions are lack of? BB10 is the best according to my experienced both platform of IOS and Android. Since BB10 software is the best in my opinion, the only thing Blackberry needed to do is come out with devices that are different than the competitors especially, has to be with a WOW factor and the spec have to be top. Even though spec are not importance than the software, but how many consumers are understand that. When consumer see this device is better spec than the other device, they will buy the better one.

LOL, a name change? Nope, sorry. Wrong answer. They just did that. Remember? Wow. People are grasping at straws here.

Saying the exact same things over and over and over again doesn't make it legit. "Break the business in two..." etc, etc. what a crock.

Apple should have changed their name to oranges in 1997. Right? "Yeah, they should have sold their desktop business to Microsoft and changed their name to Oranges".

People are SO dizzy.

Posted via CB10

Everybody makes these wild claims and insane suggestions, over and over again. Repeatedly. Meanwhile forgetting the fact BlackBerry is making the best smartphones on earth, RIGHT NOW. Their product is more advanced and compelling than anything else currently available on the entire planet.

There is nothing it can't do comparatively to other platforms. Even the popular craps all these consumer brats whine about, CAN BE USED NOW on BlackBerry 10. The fact that a couple of these stupid apps aren't available in BlackBerry World means absolutely nothing to the future of BlackBerry's position in the future of mobile computing.

People just can't see the big picture, too high on Starbucks or Tim horton's to be mindful enough to see the reality. So lame.

Posted via CB10

BlackBerry has so much unseen potential that consumers would never take the time to look at because it isn't currently increasing the share value. They own QNX. Remember that little acquisition? LOL. People clearly don't understand the scope of that they intend to accomplish in mobile computing. People are too busy posting selfies and food images to in stage am to consider the scope of what they mean when they're talking about mobile computing and the Internet of things. A couple of common phrases that mean more than an average consumer seems to be able to fathom.

Posted via CB10

Interesting thoughts throughout this thread and I have read every comment, along with the article, up to this point. The nagging thing in the back of my mind is finding it hard to believe that BBRY's board and management doesn't know what they are doing. Whatever the current plan or strategy is doesn't seem to be working and I do not get the sense that there is a viable alternative in place.

I just wish they would get it right. They have a very good product but for whatever reasons, they are not connecting with the masses

Posted via CB10, Rocking the Z10

Going private would completely kill BlackBerry forever. It would never turn around. In fact BlackBerry needs public scrutiny to offset its lack of corporate governance. Once in private, no customer would trust BlackBerry and it's enterprise business would clapse immediately.

MS

Very accurate comments here as to the short influenced media bias that is impeding BlackBerry's traction.....

Posted via CB10

I didn't take the risks I did to make 30%. I don't want them to go private, I want them to break even soon and work their way to profitability, making inroads not just in the smartphone vertical but with M2M and using their NOC for other purposes.

Chris,

Dude please edit the article IMMEDIATELY:

"Back in 1998, Research In Motion went public too. Then came BlackBerry, then came CrackBerry, and now many years later ... the company is thinking about whether it makes sense to remain publicly listed."

RIM has never changed their name to CrackBerry!! Get rid of that please as their two separately and wholly owned identities; one does not share in the business of the other even though one relys on the business of the other.

You're misunderstanding.  The company went public.  Then the BlackBerry product came out.  Then CrackBerry website was formed.  In that order.  Nothing else implied.  

Maybe not intentional but the wording seems to be implied as you begin the paragraph with Research in Motion went public. The following sentence begins with 'then came BlackBerry' talking about the same company yet goes on to CrackBerry in that same sentence, thus the context is joined and why I was at a loss thinking - their not the same company.

They've launched four devices this year already and are selling millions of phones in a depressed market segment.

On what basis do you think they're dying?

If they go private, it will be precisely because they cannot control media sentiment.

To understand why you have to look for the money.

BlackBerry 10 phones are perfectly good devices with a decent ecosystem and the best MDM on the market. They're an obvious choice for enterprise and a good buy for discerning consumers who want to get stuff done.

Sales weren't as great as the market suggested, but they weren't far off the stated guidance. The problem for BlackBerry is the general depressed state of the market, where only newer manufactures - mostly in China - are seeing growth. For everyone else times are getting tougher. And that includes Samsung and Apple.

Chris I do appreciate this example you have made. But if any large investor takes a large block of BBRY and files a Form 13D or 13F he or she basically can makes some serious moves. The board has let the market cap drop to alarming levels. Anyone with a spare 1/2 billion kicking around can get access to billions of assets. It's that simple....sure the deal may not be the best for us shareholders... but if an investor with ambition takes on BBRY look out below.... Daniel Loeb , Bill Ackman.....are a few guys that can replaces a board and move a company.

The board should be shaking in there boots...this is not the boards money ( 3.1billion) and assets ...it's the shareholders....and this stock is out of control. But sold for pieces there is billions to be make.

I hear you. However I don't understand why you're trying to correct me with an unnecessary correction. Did I ever claim the cash on the balance sheet belongs to the board? Of course not. Nor did I even mention the balance sheet, for that matter.

You'd need more than 1/2 billion.

Fairfax alone hold almost 10% and with Mike Lazirids holdings that's around $800 million. So you'd probably need at least a billion. And the moment the market realised you were buying shares the price would rocket.

It's not that easy. Before you can buy the necessary shares, someone has to be willing to sell. Can't be too many institutional investors that bought at $9.

Very, very well said. Thorsten should not only be removed from the board, but also as the CEO. It is as if everyone at BlackBerry is a deer caught in headlights, totally stunned!

I fail to see the logic in asking for Thorsten's resignation. RIM used to be one of the best tech companies in the world Are people expecting him to single handedly fix a derailment in less than two years? So what if he pulled back on the PB? That's grounds for him to resign?

Yes, BBRY own QNX, but I thought they purchased it largely to use it for a handheld device platform (in a snap decision), and it was relatively cheap. I do not think BBRY has a capability to run QNX. They have to run their own company first. Besides, I always thought that BBRY's choice of QNX as a cell phone platform was a big mistake. They had initially a great deal of difficulties to even implement email and other basic PIM functions in the PlayBooks. RIM's purchase of the QNX probably had a lot to do with its physical proximity (Ottawa), relatively small size, hence cheaper to buy. RIM did a lot of thing to prepare for a "new platform" including buying TAT (remember them?). But what did they do with it?
Going back to the subject in hand, I am pretty sure that BBRY is actively exploring the Plan B now, but going private is hard to believe (possible but not probable), and major stakeholders have been curiously quiet these days in spite of a series of bad news. Something must be cooking for sure.

RIM bought QNX because it's a robust, reliable, low footprint OS with a couple of decades of consistent operation and significant market share in its market.

You're dead right about them underestimating the work involved in transferring BBOS functions to BB10, but it was still a decent move.

The mistake was in not developing BBOS at the same time. A better Java Virtual Machine and browser would have transformed the devices and provided useful new devices last year when they failed to introduce a new phone and consequently dramatically lost market share.

I totally agree with your assessment that the failure to further the development of BBOS in parallel with the Bb10 development missed the chance to save BBRY. Souped up Bold 9900/9930 for example would have bought them a needed time until the BB10 devices are brought to the maturity.

only JSR 271 would have helped with a better Java Virtual Machine. Considering nobody but Sun Microsystems (and no I don't mean Oracle who owns Java now) is the only one using it for a defunct mobile OS based on it; it had no future. BBOS should've been killed off earlier with features brought into BB10 from the beginning, not having us wait until BB10.2.

What about Dalvik? No need to stick with J2ME with todays processors.

It would have had the advantage of being more efficient than the Sun J2ME JVM, cheaper (no license fee), and fairly easy to adapt Android Java apps perhaps.

It would have meant a significant rewrite of JNI code but they could then have leveraged the rewrite and added a native Dalvik JVM on BB10 - avoiding upsetting thousands of Java devs in the process.

Silver Lake is behind Dell going private. Dell's new business restructuring plan is to become an "IT service" company. If that is so, Silver Lake and Dell are probably already thinking that either buying or merging with BB would catapult them to a leadership position in enterprise so discussions with Blackberry make a lot of sense. Dell could make and sell hardware including BES10 servers, OS10 phones and tablets for in vehicle etc., software and security and MDM services, plus be in a good position for enterprise and consumer M2M as it develops. For Silver Lake, Blackberry would just be a snack, however, I am sure they would like take Blackberry private on friendly terms and then merge it with Dell which will go private early September. Silver Lake taking Blackberry private could happen soon after Dell goes private in September.

I think the Returns article is being overblown, but I do think going private could be a very good thing for BlackBerry in this sense: the constant media and analyst speculation of BBs imminent demise is undoubtedly hurting the BB10 turnaround. Even in my smallish law firm there was doubt about upgrading to BES10 based on the concern we might be spending money on a platform which might not exist in a few years. Imagine if you are in charge of technology at a major firm and it is egg on your face if you recommended investing in a platform which subsequently ceased to exist. the constant barrage of negative news and analysis would largely dry up if BB were private - no one would really care anymore.

Posted via CB10

Watsa could still arrange to keep his percentage ownership with whoever may take it private (if that were to happen), so the take out price could still below his average cost. He could still make his profit later as a private company. I am hoping a private buy out does not happen. I still believe they can turn the company around over time. It just depends how much time they have I guess.

Chris, this is such a great article - I think a version of this, combined with your previously stated thoughts on cross platform bbm, should be a mandatory link from any CB article discussing the future of BB.

the good bad and the ugly ,that's what happening with BB right now.
every one just playing and toying with their ideas, even speculating on future.
its just my feeling that that good is seriously awaited

They're just setting things up so that the enterprise and government division can go private if they need to split the company.

Sent from my PlayBook v10.2.0.1155 Lite

Chris this time you are way off base with your assertion. BlackBerry has only one option to stave off complete collapse - privatization - but at this juncture does the company have enough money to buy back all outstnading shares even at current basement prices.

Thanks for the article, Chris! As soon as I saw that story last night, I was hoping you'd write your view on it.

For me, I want to see this company succeed on its own, with its own OS on its own devices as an independent company. Like you, I think this is BlackBerry's "Plan A." That's how this company has traditionally operated and that's how I hope it'll succeed.

One question I have is: Do you believe that going private would lessen the amount tech bloggers write about BlackBerry? I would think that as long as BlackBerry continues to produce smartphones and products, they'd get the media attention, but it'd be with more of a focus on their products. Too many sites these days use BlackBerry's financial position to determine the competency of its products. I'd think that losing the transparency would force more writers to focus on the quality of the products. What do you think?

Considering the consistent obvious bias against BlackBerry in the media, I think this is a great idea.

Media Attention is generally driven by PR efforts while public companies get more news about them they get bad news about them too. Going private makes sense in a lot of ways but sounds like there isn't enough time for them to work it out.

Maybe BlackBerry is being bought out by Dell? LOL You heard the rumor here first! HAHAHA

Based on the sum of parts analysis, the handset business is valued at 0. (Scotiabank) It is a easy way to profit by ripping apart the company themselves because the board of directors did not want to do it.

Thanks Chris, nicely done.

I'm just listening to the CBC News announcing the "going private" rumours AND the "news" of the recent lay-offs and executive departures. LOL

Posted via CB10

Going private would take away the nonsense and factless articles bashing BB10. But at this point in time, its not a good idea. Because it may make them look like BB10 failed or something.

BBRY, stick to your guns and sell BB10 hardware. You have the best mobile platform on the planet. Just let people know this fact.

They can buy me out for $40+ per share. And I will have also bought my first and last blackberry phone.

Watsa will probably keep offers entertained over $20 anyway.

Part of me thinks that Fairfax should buy out blackberry. That I would support for less than $40.

Posted via CB10

Going private will be a surefire way for Blackberry to keep the media and nay sayers from knowing exactly where the company financially stands, makes sense from that perspective.

#BB10Believe #BlackBerryNation #BB10Army #BB10Freak #KeepMoving #TeamBlackberry #BBMCrossPlatform

I'm MongezaurioBerry

Where do I join a shareholders class action lawsuit if this board attempts to take BB private? If you assemble enough feeble minded managers and directors you manage a business until it makes such a going private transaction possible.

What this company needs is a new CEO and board chairman! YTD they've lopped 15% of the share price alone. Something definitely stinks at BB and it's in the board room.

Somewhere in this discussion, somebody was emphasizing that the current CEO is a PhD or something. I think this was totally irrelevant. I do not value somebody just because one has a PhD. There is very few PhD CEO in large corporations, and not all of them are successful. CEO can be judged by the result, but not by the educational background alone. Another end of the spectrum to prove this point is to look at Bill Gates and Steve Jobs, both of whom were college dropouts. But one prominent thing that is common to both of them is their ability to predict the future (i.e., vision), sense what the market (users) really wants and implement/execute the plan superbly. I do not think we are seeing this in the current BBRY management. Instead, we have been seeing negative news after negative news with no end in sight.

I do agree that the current CEO and the management failed (obvious to most of us, even the uninitiated), and perhaps a new blood with uncanny ability to sense and dig out the market demand, and create matching products ( will have to be introduced, and fast.

You thought BlackBerry stocks tanked before? Replace the CEO and see what happens. The Titanic would have nothing on this end result.

People seem to be expecting Thorsten to miraculously fix a debacle, that was years in the making, overnight. How long did it take for Apple to recover from almost filing for Chapter 11? The company will still make mistakes. All companies do. Negative news usually flies faster for BlackBerry.

Sorry for a negative opinion, but I am just disappointed. I do want BBRY to succeed before people start using their middle fingers for swiping and navigating the BB10 devices. I am personally OK for now with my 9900 and the iPhone 5, but I wish BBRY will wage much stronger challenges, as it will bring us better products, but more importantly, will keep the "other guys (Apple et al)" in check and honest.

It's still early days in the transition, Plan A is still on the table, it will take exposure of the devices and BB10 OS on the market and in the social circuit (enterprise and private) to regain the interest of the smartphone users. As a Blackberry fan I would like this process to go quicker, but it just takes time.
As Chris mentioned, it could well be that the board is exploring a range of possibilities, and yes that is their job.

So .... if they did go private, what would the buyout offer be, remembering that book value is $18.14

PLEASE! For the love of God! BBRY go PRIVATE!!! :-D

I have been hoping for this for many months now. I think it will right the ship and allow BBRY to focus on what works, rather then rush products out to appease shareholders.

This is the best BBRY news I have heard all year!

I don't see how going private will benefit BlackBerry here and now. They need better media coverage. Here in the UK the everyday man's tech news outlet, the BBC, rarely mentions BlackBerry news. No mention of BBM going cross platform. No mention of BlackBerry success in securing key Government certification. Nothing PRO BlackBerry at all.

Conversly there is no mention of the issues with lack of security in BOYD, which will especially effect smaller firms. No mention of the found flaw in ALL android devices, and forget saying anything negative around Apple products.

BlackBerry doesn't need to think about going private they need to spend some time being more public.

Posted via CB10

I have mixed feelings about this.

First I may be tempted to say "one of the worst growth factor for BlackBerry is BBRY". Why that ? Because I believe the stock fluctuation has been a pain to convince enterprise to stand with legacy devices (not to roll out their BYOD/MDM alternatives) and - later - adopt BB10 infrastructure. When I expose my beloved BB10 devices (Z10s, Q10, Q5) I still randomly get the infamous "Didn't BlackBerry bankrupt already ?" remark.
And I do believe BBRY stock has been gambled to death by shorts (no conspiracy thing here, just the usual behavior in WS).

Second, I'm a "stick to the plan" maniac. And the plan is clear (in very short) : first restore the brand image and loyalists adoption then fight back for leading position. And there comes the nerve of the war : money. Going private will freeze the enterprise valuation (again, in very short) and deprive the company of the (virtuous) financial lever they mandatory need to fight against hundreds billions dollar giants.

Finally, while I'd love shorts and WS's bears to be [bad word here] hard, I don't buy it.

Then, it's interesting to note all the stock valuations we can read around. We're talking back about the book value or the level of the possible "going private" offer (from $12 up to $25 or even more) and that is good for us, shareholders. I don't expect a skyrocket, but IMHO, this has brought some bull interest here ...

Whatever.
I stick to MY plan, as the risk/reward ratio is still OK for me: I hold tight and shine my golden [oops, another rude word].

Pages