BlackBerry receives $1 billion investment, CEO steps down

BlackBerry’s serious troubles began last June, when the company announced $84 million operating loss despite increased shipments and revenue. The very next quarter the company reported $965 million loss, 97% of which is due to the terrible BlackBerry Z10 sales.

BlackBerry has been looking for partners to invest into the company since its financial troubles became clear. The company’s board has even pushed for a quick sale before the end of the year. At the end of September BlackBerry’s fate seemed sealed when a deal with a consortium led by Fairfax Financial Holdings Ltd for $4.7 billion was announced.

It seems the acquisition deal with Fairfax have been abandoned – Fairfax couldn’t secure the cash because the banks didn’t believe BlackBerry can be saved. Instead Fairfax and other investors will make a $1 billion investment in BlackBerry and push the company into the direction they want. How are they going to do that? With a CEO of their choice, of course!

As part of the new deal BlackBerry’s CEO Thorsten Heins will be stepping down and John S. Chen will take his place until the company is back on its feet. Chen has previous experience with saving troubled companies, which is why the investors want him explicitly. If everything goes as planned, he will also become the Chairman of BlackBerry’s board thus becoming the most powerful man in the company.

BlackBerry shares dropped 18% in pre-market trading, but now that the market is open they are down by about 10%. It seems not everyone is happy with this investment.

So, BlackBerry is alive and there is a chance it may have a bright future ahead after all. I guess only time will tell if the company’s new direction will be successful or not.

Source 1 | Source 2 | Via