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Blackberry Forms Board Committee to Explore Options

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Posted by Tsepz_GP

BlackBerry Ltd. said it’s considering putting itself up for sale, the strongest indication yet that the smartphone maker won’t remain independent as competition erodes sales and hammers its stock price.
A special board committee will consider ways to enhance BlackBerry’s value and scale, including joint ventures, partnerships or a sale of the company, according to a statement today. JPMorgan Chase & Co. will serve as its financial adviser. BlackBerry shares gained as much as 9.1 percent in New York.

The announcement builds on a move last year when BlackBerry hired JPMorgan and RBC Capital Markets to advise the company on strategic alternatives. At the time, Chief Executive Officer Thorsten Heins said a sale wasn’t the “main direction” he was considering. Prospects have worsened since then, with the new BlackBerry 10 -- the linchpin of a turnaround strategy -- meeting scant demand.

“What BlackBerry is doing is the appropriate course of action,” said Charlie Wolf, an analyst with Needham & Co. in New York who has the equivalent of a sell rating on the stock. The likelihood of a sale is at least 50 percent, he said. “The other options, much less likely.”

Heins will join fellow board members Timothy Dattels, Barbara Stymiest, Richard Lynch and Bert Nordberg. Fairfax Financial CEO Prem Watsa, whose firm is BlackBerry’s largest shareholder, will step down from the board to avoid conflicts that might arise from the discussions.

'Right Time'

“Given the importance and strength of our technology, and the evolving industry and competitive landscape, we believe that now is the right time to explore strategic alternatives,” Dattels, a TPG Capital executive who will serve as the committee’s chairman, said in the statement.
BlackBerry was trading at $10.31 at 9:44 a.m. New York time, a 5.6 percent gain, after climbing as high as $10.65 earlier in the session. The surge followed a 5.7 percent rise on Aug. 9, the previous trading day, when Reuters reported that the company was considering going private.
Heins and the board are coming around to the idea that going private would give them the leeway to fix problems out of the public view, Reuters reported, citing unidentified sources. Prior to Aug. 9, the stock had tumbled 22 percent this year.
Canada Pension Plan Investment Board CEO Mark Wiseman said last week he would consider an investment in BlackBerry if the smartphone maker decided to go private.
“It’s safe to say that any large deal in Canada or elsewhere is something that we would make sure we took a hard look at,” Wiseman said in an interview. “You could say that about that asset.”
Silver Lake
Before Heins became CEO in January 2012, the company held talks with private-equity firm Silver Lake Management LLC about possibly going private, a person familiar with the discussions told Bloomberg News last year.
The talks were preliminary and the two sides weren’t able to agree on a potential valuation, the person said. Silver Lake has had no meetings with BlackBerry in the past year, a person familiar with past discussions said last week.
BlackBerry fired 5,000 workers last year as part of a plan to eliminate $1 billion in operating costs. Analysts had expected the cutbacks to help the company post a profit last quarter. Instead, BlackBerry lost $84 million, dragged down by the lackluster sales of the BlackBerry Z10. The new touch-screen phone, introduced at a lavish event in New York in January, missed estimates by almost a million units last quarter. The company is projecting another loss for the current period.
Seeking Partners
Last month, Heins reiterated that the company was seeking partners to expand the footprint of its BlackBerry 10 operating system and help with its turnaround. After pioneering the smartphone market, the company has struggled to compete with Apple Inc. and Samsung Electronics Co. in recent years, dragging its market share down below 3 percent.
“We will do our homework and assess what we think is best for the company and then we will have discussions and they will either yield partnerships, alliances or not,” Heins told shareholders in July at BlackBerry’s annual meeting in Waterloo.
Skadden, Arps, Slate, Meagher & Flom LLP and Torys LLP will provide legal counsel as the board considers its options, according to today’s statement.
While BlackBerry has a good lineup of products, its latest smartphones were released too late to compete with the iPhone and devices running Google Inc.’s Android operating system, said Needham’s Wolf. That’s turned its recovery plan into an uphill battle, he said.
“The ‘reinvention,’ if you will, has been a dramatic disappointment,” he said.


Posted by Supa_Fly
Just read this news. Doesn't bode well at all. So ... I'll be done with BB10 and sad to say it but they did try to put up a good fight!

Possibilities - VERY weak and open to licensing BB10, sell the company or the OS rights outright, or go completely private and seek very astute or foolish entrepreneurs wealthy enough to take a vested risk (maybe Lazaradis will bail them out with complete ownership).

Either way some comments show complete ball-sacking comments with lack of common sense ...

Thorsten Heins, President and Chief Executive Officer of BlackBerry, added, “We continue to see compelling long-term opportunities for BlackBerry 10, we have exceptional technology that customers are embracing, we have a strong balance sheet and we are pleased with the progress that has been made in our transition. As the Special Committee focuses on exploring alternatives, we will be continuing with our strategy of reducing cost, driving efficiency and accelerating the deployment of BES 10, as well as driving adoption of BlackBerry 10 smartphones, launching the multi-platform BBM social messaging service, and pursuing mobile computing opportunities by leveraging the secure and reliable BlackBerry Global Data Network.”

"we have a strong balance sheet ..." BULL! If this was the case you would not need to fire 7000 employees and drop 3 executives in the course of 9mths!
"and we are pleased with the progress that has been made in our transition" Are you fraking kidding me? Pleased?! Clearly the CEO, board and executive staff don't have the cojons to really push this company, they have NO ambition and are just complacent in getting paid!!"

Sorry I cannot any longer intelligently condone this company and their products. Their IP, servers, and server software is great .. clearly they had intelligent staff but thats no longer relevant.

Posted by Tsepz_GP
I honestly thought they had a chance, Thorsten had many of us thinking so. They have so much IP and other tangible and intangible assets, yet despite all this, they just can't slowdown the domination of the 3 "new" juggernauts, Apple ,Google and Samsung.

I think they will be a juicy buy for any company inside or interested in the mobile industry, I can see Apple or Samsung doing a lot with those assets if either one of them acquired BB, interesting times ahead.

Posted by etaab
I didn't think they stood a chance. Ive never owned a Blackberry, never liked Blackberry and their products are to me at least completely unappealing. I know they'll have some fans, but they've always been a backwards company trying to make it in a world of much more appealing products.

The best thing they could do is sell off the company and its patents and retire from trading. Nobody is going to miss them. If it were to happen right now, I doubt anyone would even care in a years time imo.
[ This Message was edited by: etaab on 2013-08-21 21:27 ]

Posted by Supa_Fly

Alas another option BlackBerry can do is go private, and there seems to be a major push into this direction; which means private funding, operations, and direction could be very positive and drastic. Then again selling off the company would be in THE best interests for the competition and for those of us as customers.

Posted by Dups!
Aaah well, the Q10 will be my friend for many years while I try to get used to the full-touch phones. As it is, I am forcing myself to like the touch only S4. I am just too old-school, I guess.

Posted by Supa_Fly

On 2013-08-13 18:35:23, Dups! wrote:
Aaah well, the Q10 will be my friend for many years while I try to get used to the full-touch phones. As it is, I am forcing myself to like the touch only S4. I am just too old-school, I guess.

Don't worry its still business as usual, no changes in provider sales, kiosks, media etc. They should improve immensely if they go private. I'll have to force myself to like iOS again, but I still love this Z10 (which I'll keep for a long time).

Posted by Dups!
I wish I was as optimistic as you, Supa_Fly, but I no longer am when it comes to BlackBerry. They have left a bit too late I feel.

If they manage to pull themselves out of this I'll be the happiest cause I'll be getting my favourite QWERTY keypad.

Posted by Supa_Fly

On 2013-08-14 17:18:21, Dups! wrote:
I wish I was as optimistic as you, Supa_Fly, but I no longer am when it comes to BlackBerry. They have left a bit too late I feel.

If they manage to pull themselves out of this I'll be the happiest cause I'll be getting my favourite QWERTY keypad.

It takes a lot of "faith" to be as optimistic as I am, agreed. Still you can get Q10 even now and it'll serve you well. If we recall what happened to Siemen's as a phone company, their phones still sold quite well up to a year after they bowed out; warranty support was still honored, and considering the Q10 is a smartphone - and will get MirrorCast support (whereas my Z10 will not) in upcoming BB10.2 (SDK went live yesterday) and is a BIG deal to end users and developers ... the Q10 will do quite well still. There is no legacy code stopping development for vendors/coders/end users from enjoying it like any other platforms smartphone.

I don't ever recall seeing only 2 dominant smartphone players EVER in the phone industry ... nothing close to what's been going on the last 2 years. It has completely mirrored the desktop PC industry of old and current.

Posted by Tsepz_GP
BlackBerry said to be destined for breakup, phone business called ‘essentially worthless’
BUSINESS August 21, 2013 at 12:25 PM
With BlackBerry getting desperate, a new report claims that a breakup may be inevitable at this point. BlackBerry is beyond difficult to value right now but according to some industry watchers, any remaining value plummeted when BlackBerry announced it is exploring a possible sale. ”You’re effectively killing that business by saying ‘I’m up for sale,’ ” Red Sky Capital Management’s Brian Huen told Bloomberg on Wednesday. “Nobody is interested in buying the entire entity. I think they are now in the phase of saying, ‘We will do anything to maximize value, including breaking up the company.’ “

Analysts at Raymond James and BMO agree that a breakup is likely coming, and they don’t expect BlackBerry’s struggling smartphone business to make it out alive.

“The phone unit, BlackBerry’s biggest source of revenue, is essentially worthless because most buyers would shut it down in favor of their own technology, at a cost of as much as $800 million, said analysts at Raymond James Ltd. and BMO Capital Markets,” Bloomberg’s Hugo Miller wrote. “Its patents, software and a secure network are each worth more than $1 billion, the analysts said, and the company has about $2.8 billion in cash.”

Earlier reports suggested that there is still much more value left in BlackBerry and the huge discrepancies among analysts can likely be attributed to the fact that BlackBerry is currently next to impossible to value.


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