BlackBerry's Best Survival Plan Is as Private Business Phone Maker
NEWS ANALYSIS: Fairfax Financial Holdings’ letter of intent offering $9 per share to take the mobile phone maker private looks like the most viable option for BlackBerry.It’s hard to believe that it was only six months ago when BlackBerry started selling the new Z10 touch-screen phone in the United States, which the company claimed would help it reclaim its place as a leader in the smartphone market. The new BlackBerry 10 phone was greeted with enthusiasm with its slick new operating system, its well-designed hardware and a growing collection of apps. But despite the initial promise, sales fell short, the stock price collapsed and even the staunchest BlackBerry fans had to wonder if the company would survive at all. Then, on Sept. 20, the same day that Apple launched the latest version of the iPhone, BlackBerry announced a $1 billion quarterly loss and that it was laying off 40 percent of its employees. BlackBerry’s battered stock tanked. The clamor of nay-sayers rose to a deafening pitch. BlackBerry is a dying company, many said. But BlackBerry isn’t dead yet. But it is going private. A lot of the reason for the move, announced on Sept. 23, is to escape the investor panic that is steadily eroding the company’s value. The idea is that by working with Fairfax Financial Holdings to buy out the public stock at a slight premium, BlackBerry will get the peace and quiet it needs to really restructure and get its business into shape to either come back or to sell itself to some other company.
The company has said little about its decision to takes itself private. What little was said about the future of BlackBerry came from Prem Watsa, CEO and chairman of Fairfax Holdings who is also a former BlackBerry board member.