New CEO. Check. New name. Check. A new owner?
Call it BlackBerry Reboot, version 3.0. BlackBerry, the one-time tech giant battered by the shift to newer mobile-phone models, has formed a special committee to examine strategic alternatives. In other words, the beleaguered handsetmaker will try to sell itself, or figure out some other last-ditch effort to save the business.Any option chosen should quicken the development of BlackBerry’s new software, the BlackBerry 10, says the Waterloo, Canada-based company. “During the past year, management and the Board have been focused on launching the BlackBerry 10 platform and BES 10, establishing a strong financial position, and evaluating the best approach to delivering long-term value for customers and shareholders,” says director Timothy Dattels, who’ll chair the special committee. “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.”
Shares of BlackBerry immediately rose 6.7% to $10.51 in pre-market trading, after the company momentarily paused training.
The decision to find a new escape route follows five years in which BlackBerry’s phones gave up their industry-leading position to Google GOOG -0.27%‘s Android phones and Apple AAPL -1.42%‘s iPhone. BlackBerry, which changed its name from Research in Motion earlier this year in a different bid to restyle the ailing company, experienced a 93% drop in share price during the past five years. And the company fell deeply into the red in 2012, posting a $646 million loss, in contrast to earning $3.5 billion just two years earlier.
A new name wasn’t the only thing that BlackBerry tried. The two men who founded the company, former billionaires Mike Lazridis and Jim Balsillie, were both left their roles with the company in the past two years. Balsillie, who had been the CEO, turned over control to current chief Thorsten Heins in 2012, who orchestrated a rally in BlackBerry shares earlier this year. (That was eventually quelled by lackluster reviews of the new phones.) Soon after, Balsillie stepped down as a director. Lazridis did likewise a few months later.
Putting itself up for sale has forced one director to step down. Prem Watsa, CEO of Fairfax Financial , resigned because he feared potential conflicts. Watsa’s Toronto-based Fairfax owns about 10% of BlackBerry, but his time on the board was a only a short stint. He became a director following the 2012 shakeup that propelled Heins to the top job. Watsa, whose investing letter is as closely examined as the annual address from Warren Buffett, is known as a skilled value investor and stockpicker.
Advising BlackBerry in the process are JPMorgan and legal firms Skadden, Arps and Torys. – Yahoo News
