BlackBerry's bid to find buyer fails; chief executive Heins out

BlackBerry's bid to find buyer fails; chief executive Heins out

Summary: The beleaguered phone maker is waving goodbye to its chief executive and senior directors as the company's bid to find a buyer fails.

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TOPICS: BlackBerry
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(Image: CNET)

BlackBerry is resorting to "plan B" in efforts to keep its head above choppy market waters.

The beleaguered smartphone maker is pulling the plug on finding a buyer amid financial downturn, and will replace its chief executive Thorsten Heins, and other senior directors.

Months after trying to find a buyer for the company, investment firm Fairfax Financial, which put forward its intent to buy the firm for $4.7 billion, had until Monday to examine the company's books. 

In a statement before Monday market opening, Fairfax confirmed it had concluded looking for "strategic alternatives," which included, among other things, finding a suitable buyer for the company.

Since announcing its intentions for a buyer, a bevy of Silicon Valley giants have reportedly looked into the company to discuss its future, not limited to Facebook, and chip-making giant Qualcomm and private investment firm Cerberus.

The private investment firm said it will attempt to raise about $1 billion by selling convertible notes in a bid to stabilize the company's dwindling cash position.

It comes not long after BlackBerry's fiscal second quarter results, which saw the company lose close to $1 billion in losses during the three-month period, ending August 31. BlackBerry also burned through about $500 million of its cash reserves. 

John Chen, who formerly served as chairman and chief executive of enterprise technology firm Sybase, will replace Heins once the deal has closed as interim chief executive. Chen will also serve as executive chair of BlackBerry's board.

Meanwhile, Fairfax chief executive Prem Watsa will be appointed lead director, and chair of the company's compensation committee.

Closing of the deal is subject to conditions, including approval from the Toronto stock exchange.

"Today's announcement represents a significant vote of confidence in BlackBerry and its future by this group of preeminent, long-term investors," said BlackBerry board chairperson Barbara Stymiest in prepared remarks. "This financing provides an immediate cash injection on terms favorable to BlackBerry, enhancing our substantial cash position."

The news follows an earlier report from The Globe and Mail, citing sources familiar with the matter.

As of pre-market trading on the Nasdaq stock exchange in New York, shares in BlackBerry ($BBRY) have tanked by more than 21 percent. Shares were halted for a few minutes before market open.

Screen Shot 2013-11-04 at 09.02.39
$BBRY before market opening on Monday. (Image: Google Finance)

Topic: BlackBerry

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44 comments
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  • BB

    Should just be put down..............
    Boothy_p
    • Yea, thats right!

      Just strand millions of BB users including various government employees around the world. They don't have any important information on those devices.

      ;)

      So, I wonder how this will really play out? I don't see a buyer now until cash is about to run out at the earliest.
      rmark@...
      • Microsoft did it, when they abandoned Windows Mobile...

        Now they are doing the same with XP...

        At least those two examples, show it's doable, then again, they show you'll be a loser if you did it... are you listening Ballmer?
        cosuna
      • happens...

        That's what happens when a company fails to deliver what people want.

        The company is not going to exist on government contract alone, and when those contracts are up.... well... then they are truly done.

        At this point BB hasn't made anything new, they really need to partner with Android, and create a BB with a android software platform running their own proprietary apps. That's their only hope. It's not a hardware problem, BB makes great phones, but no one supports their OS anymore and that is where the money is in a Smartphone business... I just hope they can make that transition.
        zithero@...
        • u mean partner with google

          BB has 3 apps on the android market (play store) that pops up on my phone when searching for "blackberry limited". This shows they are trying something... i guess anyways.
          Free Webapps
      • Yeah, why do they still garner the trust anyway?

        A win win would be if Apple picked up BB as a subdivision an added whatever gems they have left to their portfolio and software enhancement. Picture iOS Enterprise with Blackberry Management tools or just iOS with Blackberry.
        jfosterusa
    • Or maybe we need a reverse merger...

      QNX could take the reins of the beleaguered company while pushing the newly created as QNX 7.

      Afterwards they could push the full solution (QNX, BBM, BB Enterprise Server) towards the embedded market, including manufacturing, logistics and Point-of-Sales, using the Android emulator as the basis to sell a complete ecosystem.

      If you want to find an analogy. You could turn the dog of OS/2 into eCommStation, which until 2007 dominated the ATM market, due to the heavy investment in Rexx, 3270 and 5250 terminal compatibility that IBM invested in the heyday of the OS.
      cosuna
  • Unheard of

    It may happen occasionally but I don't recall hearing of it before; where the CEO and board members are fired. Seems deserved in this case as they are in a death spiral and seem to have taken every wrong turn along the way under their failed leadership. Sparse solace for fired workers who should expect more of the same.
    greywolf7
    • About time...

      I have been stating for a while that the CEO and C Level staff should have been sacked. Heins made a complete mess of launching the new BB10 products.

      Anybody who has actually used BB10 will agree it is a great product and it is still at early stage. QNX (BB10) is a great OS.

      Lets hope Chen can take the important steps into turning BB into an important player once again, who the heck wants just a 2 horse race of iOS and Android!
      pjc158
      • That was what people said about WebOS

        Just being good is not going to be enough to occupy a slice in the mobile OS market. QNS needs to have something that the consumer wants but not available in either iOS or Android. BB may still keep a niche market in government and enterprise where security is the ultimate concern. But they should not waste any more resources in the consumer market for its OS. It has a better chance to compete on the device level if it knows how to bring the manufacturing cost down.
        yadayada@...
        • Agreed

          Be the most secure platform on the planet, fill the niche of govt and very high security applications. Once they have all that locked down again maybe start to make other forays perhaps even back into consumer markets.... they have security experts, why not make and licence software for banks or even mobile bill payments (think the Mint app) I was a little leery of giving mint.com all my login's... I'd feel a little safer with bb handling it due to the track record they have (unless you could the billion of their own money which they lost :) )
          dosmastr@...
          • correction

            unless you COUNT not could the billion....
            dosmastr@...
          • sure they may be secure

            But if im not mistaken, if they have issues in the backend, doesnt that cripple their services. Like the time enterprises and other companies went dark in communications because of same server/service issue? After that i knew they would hurt big.
            Free Webapps
          • correction

            Not same, some server/service issues.
            Free Webapps
  • Start by reopening the BB9900 production line or releasing tweaked 9900

    We are finding inventory really hard to get and are "not there yet" for BB10. Surely we're not the only ones.
    dowlingm
  • Worst thing about this affair

    How much Thorsten will pocket on his way out the friggin' door.
    dowlingm
  • BlackBerry: If You Are Going through Hell, Keep Going.

    BlackBerry digging its own graves. Selling company is easy way out for cowardice, not great leader. Now time to face painful reality with vengeance.
    There is only one way: climb back out is very hard, work harder, work smarter, and push all the way. There are much values within BlackBerry. Use them effectively.
    Every small market share gains, every good customers win counts, good for customers good for employees good for BlackBerry.
    Ready to make bold moves, take calculated risks, and give them every BlackBerry has until last breath.
    Netteligent
    • Blackberry to Win as a Team or Die as Individual

      Apple and Android continues to win heart and mind of customers. Part of their success due to the spectacular failures and self-destruction of Microsoft and BlackBerry.
      BlackBerry can leverage its strengths and start to integrate Android KitKat into their platforms.

      Either way, it is up to Blackberry to win as a team or die as individual
      Netteligent
  • The solution to Blackberry's problems

    If Blackberry ever wants to make a comeback, they have to realize that Android is king. Everyone wants Android. It works well, and people like their apps. They have to find a way to put Android on their phones, while keeping the physical keyboard, which is the hallmark of Blackberry. Or have some phones with the keyboard and some without. I'm not talking about an operating system that "supports" Android apps, I'm talking about Android. Android, Android, Android. They have to be able to write on their specification that the OS is Android, nothing else.
    shmuel67
    • Kings are made to fall

      Only the opening chapters on Android are written. Patent Lawsuits may turn Android into a veritable quagmire. We will see if it can hold up to the pressure at the top or will it pop.
      greywolf7