Blackberry doldrums , folks? Well, Blackberry Ltd has decided to shove away the plans of selling out and has announced that the present CEO of the company will be stepping down to pave the way for another. This has led to a 16% fall in share price. Is the Smartphone maker struggling to keep afloat?
Blackberry for sale?
We were informed that Blackberry is busy thrashing out strategic options with some potential buyers like Lenovo, Facebook, and Cerberus Capital Management LP. These firms were all ready to go purchasing Blackberry before it suddenly went for a volte face and changed its mind.
Now they are planning to raise about $ 1 billion through convertible notes handed out to some long term investors. In the share holders list one of the most notable name is Fairfax Financial Holdings.
Fairfax had placed a tentative but formal bid for Blackberry and were ready to hand out almost $ 4.7 billion. But it was the financing for the deal that had Prem Watsa take a step backwards.
The investors are disgruntled at Blackberry’s stance and one of them is John Stephenson, a senior vice president at First Asset Investment Management who stated emotionally, "BlackBerry is hemorrhaging employees, it is hemorrhaging customers. The only thing that's growing is doubt. You can argue that it's an OK day for Fairfax and Prem Watsa, but it's a miserable day for Canada. It's a miserable day for BlackBerry investors and BlackBerry employees.”
The two famous Blackberry founders Douglas Fregin and Mike Lazaridis roped in mobile chip giant Qualcomm and Cerberus as partners and had thought of prompting a bid out of them for Blackberry. These two companies were definitely interested and were chalking out an ideal bid and sent the feeler to Blackberry this weekend.
The Goldman Sachs Group Inc, was backing the consortium and the finances could also have lent in a hand but Blackberry seems to have withheld some very important information regarding property portfolios and government contracts, that left the organization musing.
Blackberry CEO replaced
A spokesman for Blackberry was heard giving a statement, "BlackBerry is confident that it has run a robust strategic alternatives review process. The board believes that the deal outlined today was the best proposal, and in the best interest of its shareholders.”
The market value of the Blackberry share fell down a 16% at $ 6.50 and the company has a market value of nearly $3.38 billion. Earlier the data showed that this was about $ 80 billion.
John Chen, has been declared the executive chairman and CEO of Blackberry and he will be replacing CEO Thorsten Heins in a period of about two weeks. Chen is into the feel of turning around the Blackberry sales as he shared his plans of getting Blackberry up and about and said "I'm doing this for the long term. I'm going to rebuild this company. I know we have enough ingredients to build a long-term sustainable business. I've done this before and seen the same movie before."
Do we dare to question that the defection of the client base, the falling shipments and a flailing subscriber base, will still keep Blackberry sailing? All this remains to be seen!