Blackberry is no longer set to be sold to its main shareholder, Fairfax Financial Holdings as part of a massive $4.7 billion deal and is instead pushing to raise over a billion dollars in capital to help it continue operations as is.
With an ailing business and over a billion dollars in losses in by September this year, Blackberry (formerly Research in Motion: RIM) originally announced near the end of the month that it would be sold off to Fairfax for the near $5 billion total. According to Wired though, there was just no way that the major share holder could raise the capital in time so instead, Fairfax is stumping up $250 million and other investors are injecting cash into the ailing company too, which is hoped will keep the firm afloat long enough to make a comeback.
“The Blackberry board conducted a thorough review of strategic alternatives and pursued the course of action that it concluded is in the best interests of Blackberry and its constituents, including its shareholders,” said current Blackberry chairman, Barbara Stymiest. “This financing provides an immediate cash injection on terms favourable to Blackberry, enhancing our substantial cash position.”
Blackberry also hired a new CEO, John S Chen, former director at The Walt Disney Company and will introduce a new lead director and chair of “Blackberry’s compensation, nomination and governance committee.” I’m sure the new hiree, Prem Watsa (current Fairfax CEO), is very capable, but I’m not sure I’ve heard such an over stated title.
With increased competition on the business sector thanks to BYOD trends and the inability to keep up the pace of developers like Apple and Google’s Android platform, Blackberry has really struggled recently, despite being one of the biggest companies in the world just a few years ago. While lately it’s made some comeback attempts and it’s recent phones have been much more contemporary, it’s yet to really break back into the market.
KitGuru Says: Have any of you guys used a Blackberry phone in the past few years? If so, were you happy with it? It seems just as a brand it’s not going to be able to make the comeback it needs.