BlackBerry was a ship sinking but a new Chief Executive Officer and a financial boost may be the lift the struggling Canadian smartphone company needs.
The company announced Monday that Fairfax Financial will lead a $1-billion investment into BlackBerry in the form of a convertible debt instead of its initial plan to buy the company at $4.7 billion. Reuters reported last week that Fairfax, which owns a 10 per cent share in Blackberry, was struggling to raise the $4.7 billion.
Barbara Stymiest, chair of Blackberry’s board of directors, had said in a statement the cash will be the push the company needs.
“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,” Stymiest said in the statement. “This financing provides an immediate cash injection on terms favorable to Blackberry, enhancing our substantial cash position.”
Former CEO of Fairfax and now lead director and chair of compensation, Prem Watsa said in a financial release that BlackBerry welcomes the offer.
“Fairfax is a long-time supporter, investor and partner to BlackBerry and, with this investment, reinforces its deep commitment to the future success of this company,” Watsa said in the release.
But there is more, the outing the old and in with the new in the form of an interim CEO. BlackBerry will bring in a man who is noted for turning plunging businesses around – John Chen. Chen will take the spot as interim CEO as Thorsten Heins steps down as the company continues its quest in search of a permanent replacement. Heins became CEO of the company in January 2012. Chen is the former chief executive of the once dying software company, Sybase.
John Chen – BlackBerry Interim CEO
“I am pleased to join a company with as much potential as BlackBerry,” Chen said in a statement. “BlackBerry is an iconic brand with enormous potential – but it’s going to take time, discipline and tough decisions to reclaim our success. I look forward to leading BlackBerry in its turnaround and business model transformation for the benefit of all of its constituencies, including its customers, shareholders and employees.”
But BlackBerry executives aren’t the only ones who are hopeful for a turnaround.
Abby Oye, 33, said he will continue to be loyal to the brand.
“I will choose BlackBerry over any other mobile company because it keeps me close to my family and friends. Blackberry Messenger (BBM) is the best thing that has ever happened to any smartphone and I have a feeling the new shift will turn things around for the company,” said Oye.
Randy Blair, 21, echoed similar sentiments.
“It would be sad to see the company go down. I think Canadians should have supported it more since it’s our brand. The phone is just as good and even better than some of the other smartphones out there,” said Blair. “Now all my iPhone and Andriod friends have BBM”.
BlackBerry recently rolled out its messenger service to iPhones and Google Androids in its momentum to save the company. It now has over 80 million active monthly users on BBM.
In September, the company announced plans to cut 4,500 jobs to help with its loses.
And as the the BlackBerry’s customers are constantly inundated with news of a dying company, executives had urged them in a open letter to continue to count on them as they seek to restructure their goals and cut expenses by 50 per cent.
