BlackBerry scraps takeover strategy, ousts CEO Thorsten Heins
Canadian device maker BlackBerry has taken itself off the market and will instead receive a $1 billion capital injection from a small group of investors, including former prospective buyer Fairfax Capital.
In concert with the investment, which the company says could increase to a maximum of $1.25 billion, CEO Thorsten Heins will resign both his seat on the board of directors and his executive post. The change of plans was first reported by The Globe and Mail and later confirmed by BlackBerry.
John S. Chen will step in as executive chairman of the moribund brand and temporarily replace Heins as interim CEO. Chen is a longtime veteran of the technology industry, having led Silicon Valley data management company Sybase from 1998 until its acquisition by German software behemoth SAP in 2010.
The investment will be made in the form of convertible notes, essentially long-term IOUs that can be redeemed for shares of the company after a set period of time --?in this case seven years, with a strike price of $10 per share. BlackBerry notes the funding, if it reaches its full $1.25 billion potential, would represent nearly 20 percent of the company as it exists today.
BlackBerry has been seeking a way to right the ship for more than a year, as the increasing popularity of Apple's iPhone and devices running Google's Android have taken significant chunks out of BlackBerry's formerly dominant position in the enterprise. Heins, who was brought on in 2012 to lead the company's turnaround, presided over the disastrous rollout of the 10-series smartphones and the belated release of BlackBerry Messenger for iOS and Android.
The deal comes on the last day of the period that Fairfax, which agreed to acquire BlackBerry for $4.7 billion last month, was given to examine the company's books. Rumors that the buyout was on thin ice have been circulating seemingly since it was announced, with recent reports tipping groups including BlackBerry founder Mike Lazaridis and former Apple CEO John Sculley as potential alternative bidders.
In concert with the investment, which the company says could increase to a maximum of $1.25 billion, CEO Thorsten Heins will resign both his seat on the board of directors and his executive post. The change of plans was first reported by The Globe and Mail and later confirmed by BlackBerry.
John S. Chen will step in as executive chairman of the moribund brand and temporarily replace Heins as interim CEO. Chen is a longtime veteran of the technology industry, having led Silicon Valley data management company Sybase from 1998 until its acquisition by German software behemoth SAP in 2010.
The investment will be made in the form of convertible notes, essentially long-term IOUs that can be redeemed for shares of the company after a set period of time --?in this case seven years, with a strike price of $10 per share. BlackBerry notes the funding, if it reaches its full $1.25 billion potential, would represent nearly 20 percent of the company as it exists today.
BlackBerry has been seeking a way to right the ship for more than a year, as the increasing popularity of Apple's iPhone and devices running Google's Android have taken significant chunks out of BlackBerry's formerly dominant position in the enterprise. Heins, who was brought on in 2012 to lead the company's turnaround, presided over the disastrous rollout of the 10-series smartphones and the belated release of BlackBerry Messenger for iOS and Android.
The deal comes on the last day of the period that Fairfax, which agreed to acquire BlackBerry for $4.7 billion last month, was given to examine the company's books. Rumors that the buyout was on thin ice have been circulating seemingly since it was announced, with recent reports tipping groups including BlackBerry founder Mike Lazaridis and former Apple CEO John Sculley as potential alternative bidders.
Comments
While some companies did sign agreements to look at Blackberry, none seemed to really be interested. It was more from curiosity. This is the end result of all that.
I don't see how this is going to help the company survive.
Oh to have had enough capital to have short sold these losers even 6 months (or 3 months) ago.
On the bright side, they got rid of Thursten Howell. What an idiot that guy is.
John Chen is a very capable, very solid player.
Did anyone see this coming?
/s
... On the bright side, they got rid of Thursten Howell. What an idiot that guy is.
Coming soon, as will be reported by Fox News .... Thursten Howell and Steve Ballmer join forces to form a new computer company .... Microberry ! .... small, but tasty. You heard it here first.
There are still lots of users out there (even Obama). Seems like someone could leverage this property.
This sounds like a great project for Carl Icahn ... The self appointed saviour of all companies, great and small. /s
Playtime is over! Indeed!
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I am glad.
There are still lots of users out there (even Obama). Seems like someone could leverage this property.
You mean the dude who didn't even know how to place a phone call with an iPhone? No wonder that he uses a Blackberry. They're basically feature phones for not very technologically savvy people who are stuck in the past.
There are still lots of users out there (even Obama). Seems like someone could leverage this property.
No wonder he never has a clue about anything that's going on within his administration and our country, all his emails are being truncated due to size.
... so that they can... what, exactly?
http://finance.fortune.cnn.com/2013/11/04/blackberry-buyout-was-always-a-joke/
Stop the political crap, or you're out of here.
... so that they can... what, exactly?
I'm thinking they should go into the secure device market for businesses. Many places now are running tablet apps for cash registers, etc. They could make dedicated, feature-rich devices catering specifically to the needs of retail businesses. With their secure network experience, they could dominate the market.