[fin2007]

Yep, so much for not having any debt. $1B in debt will dwarf the cash position of BBRY by the end of the quarter. Brilliant move by Prem to continue ot try to salvage FF investment. He really twisted on this one and is still hanging on. Props to him, BIG thumbs down to the dumb a$$ BOD.... Sad, sad, sad.....

cash for what? if you could not turn the company around, the cash will be just given as a bonus to CxOs and BODs

[bungaboy]

Lots of pissin' and moanin' from the armchair CEOs today. LoL

[silversun10]

I may be dumb but I could not see why it is a bad news for the current BBRY share holders.
Someone is willing to buy unsecured convertible note at $10 per shares for a total of $1 bil then it is equivalent to someone buys the common at $8.50 today for $1 bil.

agreed but it is bad news if a stock drops almost 20% before getting halted

[Zimbad]

very interesting turn of events for blackberry
if the market opens at the premarket price (6.38); the market is valuing blackberry at just about ~3.3 billion; when BB has 2.6 billion cash

BB hardware looks to be dead; but the other parts of blackberry are definately worth much more than that. With the cost cutting & the layosffs; once revenue remains in tact with the exploration of othert revenue options (e.g through BBM); BB will be valued at much more in the coming years

BB is now a stock for long-term longs

[Shanerredflag]

Coles notes:
Fairfax Financial and other institutional investors will invest $1B in BlackBerry (BBRY) via convertible debt featuring a 6% yield and a $10/share conversion price. If the debt is fully converted, the shares created by it would be equal to 16% of shares outstanding. If a $250M overallotment option is exercised, that figure rises to 19.2%. (PR)
Fairfax is paying for $250M of the debt, which has a 7-year term. The deal is expected to close within two weeks.
Following the closing of the deal, John Chen, formerly the chairman/CEO of database/enterprise mobile app developer Sybase (acquired by SAP in 2010) will be named BlackBerry's chairman, replacing Barbara Stymiest. Thorsten Heins will step down as CEO, and Chen will serve as interim CEO until a permanent replacement is found.
Also: Prem Watsa (already a director) will be named lead director and head of BlackBerry's compensation committee, and Heins and independent director David Kerr will step down from BlackBerry's board.
BBRY is halted. Shares were down 18.5% premarket before the company's official announcement arrived.
Earlier: BlackBerry reportedly calls off sale, replacing Heins

Posted via CB10

[Jahcure]

I wonder if prem abandon because mike L was about to get it. Now prem back on the board mm. Should be one hell of a week

Posted via CB10

[cjcampbell]

agreed but it is bad news if a stock drops almost 20% before getting halted

It got halted because of the odd action going on. BB didn't have any announcement out yet and it was all trading on the G&M article. I wonder if they jumped the gun on releasing that news.

[leafs123]

Oh shat, CEO Thorsten Heins to get $55.6-million severance pkg according to latest $BBRY proxy circular

[Superfly_FR]

1/ BlackBerry isn't for sale anymore

Today’s announcement marks the conclusion of the review of strategic alternatives previously announced on August 12, 2013.

2/ Can you see the ligh ?

“Today’s announcement represents a significant vote of confidence in BlackBerry and its future by this group of preeminent, long-term investors,” said Barbara Stymiest, Chair of BlackBerry’s Board. “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.

3/ Give me time

This financing provides an immediate cash injection on terms favorable to BlackBerry, enhancing our substantial cash position. Some of the most important customers in the world rely on BlackBerry and we are implementing the changes necessary to strengthen the company and ensure we remain a strong and innovative partner for their needs.”

4/ Promote your new star

Ms. Stymiest added, “I am also pleased that John Chen, a distinguished and proven leader in the technology industry, has agreed to serve as BlackBerry’s Executive Chairman. I look forward to continuing to serve BlackBerry as a member of its Board of Directors and chair of the Board’s Audit and Risk Management Committee.

5/NEVER burn your idols

On behalf of the Board, I would also like to thank Thorsten for his service to BlackBerry over the past six years. Under his leadership, BlackBerry established a more efficient cost structure, developed new products, saw the adoption of BES 10 and delivered the BlackBerry 10 platform. These are all significant accomplishments. We are grateful for his contributions and wish him well in his future endeavors.”

Holly cow, that's better I thought it will be. Was affraid FF made it at steal price.
Now, let's figure how long this has been set up ... and watch the roller coaster.

I'm currently checking my cash position and short terms plans, but no much doubt that in the $6ish, I may average down a bit.
Disclamer : I'm longer more than anyone may even wonder and this is by no means intended to encourage investing now. My money, my risk.

[morlock_man]

Yeah because if a man shot himself in the head, you'd need to be a doctor to work out if he was dead. If he hasn't been a failure, why don't you list his successes...

Sent from my Nexus 7 using Tapatalk 4

Thor was BBRY's Chief Operations Officer before he became CEO.

He completed their CORE reduction program that was responsible for BBRY's bounce in it's stock price leading up to the release of BB10. It downsized the BBOS development teams and reduced BBRY's operational expenses by billions. He oversaw the release of cross-platform BBM and also took the fall for the no-BB10 on the PlayBook decision.

So in the year and a half that he was CEO he turned around BBRY's operations, but not it's marketing and media perception. Big deal. He still did a damn good job.

[OMGitworks]

I may be dumb but I could not see why it is a bad news for the current BBRY share holders.
Someone is willing to buy unsecured convertible note at $10 per shares for a total of $1 bil then it is equivalent to someone buys the common at $8.50 today for $1 bil.

It's terrible news all around. The fact they took on 1B in debt tells us their cash burn is worse than anticipated and they will need that money just to survive the next year or so. Turning a debt free company upside down in the flick of a switch is a monumentally bad and telling sign. Now they have a 6% vig to pay and will have to give away equity if they actually survive this.

I think PW basically wasn't willing to let his entire investment fail so he went back to the BOD and told them he would raise $1B to save them but they had to ditch TH and put him and his appointee (Chen) in charge and pay them 6% with a convertible bond too. What could the BoD do at this point. For the moment, PW is the winner among big losers, but he is still at serious risk here and I honestly don't see how BBRY isn't done now. No real way out of them except as a very small niche player and even then, I think this news will kill any potential deals that were in the works for enterprise or gov't contracts. JHMO.............

[farad43]

Pre-market: 6.01 -1.76 (-22.65%)

[Superfly_FR]

Yeah because if a man shot himself in the head, you'd need to be a doctor to work out if he was dead. If he hasn't been a failure, why don't you list his successes...

Sent from my Nexus 7 using Tapatalk 4

cgk, you may consider he was the "in-between" guy, the one to make the dirty job (job cuts, restructuration) while still delivering.
If it appears to be real, then he did it well ...

[peter9477]

So what's the right way to look at the $1B? It's convertible at $10/share, and represents 16% of the current float. That's a (nominal, using 10/9) 11% premium over the previous price, but would dilute the existing shares by 16%. Equivalent to $9.14 or something, with some crude math done here that I won't bother sharing because it's probably wrong.

Yet the stock is down 18%.

Panic reaction much?

[cjcampbell]

It's terrible news all around. The fact they took on 1B in debt tells us their cash burn is worse than anticipated and they will need that money just to survive the next year or so. Turning a debt free company upside down in the flick of a switch is a monumentally bad and telling sign. Now they have a 6% vig to pay and will have to give away equity if they actually survive this.

I think PW basically wasn't willing to let his entire investment fail so he went back to the BOD and told them he would raise $1B to save them but they had to ditch TH and put him and his appointee (Chen) in charge and pay them 6% with a convertible bond too. What could the BoD do at this point. For the moment, PW is the winner among big losers, but he is still at serious risk here and I honestly don't see how BBRY isn't done now. No real way out of them except as a very small niche player and even then, I think this news will kill any potential deals that were in the works for enterprise or gov't contracts. JHMO.............

Dude... they didn't take on a billion in debt... it is a private placement. At worst, it's a dilution in shares.

[OMGitworks]

Thor was BBRY's Chief Operations Officer before he became CEO.

He completed their CORE reduction program that was responsible for BBRY's bounce in it's stock price leading up to the release of BB10. It downsized the BBOS development teams and reduced BBRY's operational expenses by billions. He oversaw the release of cross-platform BBM and also took the fall for the no-BB10 on the PlayBook decision.

So in the year and a half that he was CEO he turned around BBRY's operations, but not it's marketing and media perception. Big deal. He still did a damn good job.

Really? He did a damn good job? He basically ushered BBRY into the ground. Perhaps he did all those somewhat meaningful things you mentioned, but if he did the only turn he manged was to bounce the Titanic from one iceberg into an even larger one. Perception is reality, is is definitely a big deal. Sorry I am just shocked that somebody thinks he did a good job. JMHO....

[Superfly_FR]

Let's just get some kind of partnership deal done, partner with Facebook and let them use bbm, partner with Lenovo and let them use bb10 and build our phones. Let's get it done!

Go Jets go!

*supposition* Partner with MSFT and watch the SP skyrocket.
If this happens, I'll have a drink on you gang, but you'll get yours back on me !

[njblackberry]

Dude... they didn't take on a billion in debt... it is a private placement. At worst, it's a dilution in shares.

From today's Wall St. Journal:

Instead of selling itself, it is getting $1 billion from the sale of convertible debt, with Fairfax and other holders apparently betting the stock will recover.

The debt can convert into common shares at a price of $10 a share, which compares to the $9 per share Fairfax was willing to pay for the company in the deal it didn’t complete. The stock was plunging in premarket to $6.33, down 18.5%, before being halted on the news. Fairfax is buying $250 million of the bonds.

For the investors to earn big returns on the investments, apart from interest payments, they are essentially betting something will get BlackBerry shares back above $10. (The interest is 6%, a high rate in today’s world.)

So convertible debt isn't debt? You account for it differently?

[OMGitworks]

Dude... they didn't take on a billion in debt... it is a private placement. At worst, it's a dilution in shares.

I think you need to revisit this. Why is it not debt? I'm 99.9% sure it will show up on the balance sheet as debt. The street will treat it as debt. It's actually debt and a possible dilution. I don't think it being a private placement or a bank loan or whatever really matters.

[cjcampbell]

I think you need to revisit this. Why is it not debt? I'm 99.9% sure it will show up on the balance sheet as debt. The street will treat it as debt. It's actually debt and a possible dilution. I don't think it being a private placement or a bank loan or whatever really matters.

A loan and a PP are two very different things.

[njblackberry]

But will it show up as debt on the balance sheet?

[morlock_man]

It's money in BBRY's bank account, not debt until they spend it.

It's like long selling.

If in 2 years the stock is worth $20, and FF decides to cash in its chit, BBRY will have to buy the stock at market price to cover the loan.

[silversun10]

Dude... they didn't take on a billion in debt... it is a private placement. At worst, it's a dilution in shares.

about 16% dilution, approx the amount BB is down now.
as long as BB can find its footing this is a good deal, if not, nothing is going to help.
FF is putting another $250 mln at work, when he said he would not buy more shares. That has to be a positive.

[Superfly_FR]

It's terrible news all around. The fact they took on 1B in debt tells us their cash burn is worse than anticipated and they will need that money just to survive the next year or so.

slow down ... it doesn't tell us anything. Could aswell be "some fresh air" for the next 6-8 months and (as officially stated), reinsure big clients about BB future.

I think PW basically wasn't willing to let his entire investment fail so he went back to the BOD and told them he would raise $1B to save them but they had to ditch TH and put him and his appointee (Chen) in charge and pay them 6% with a convertible bond too. What could the BoD do at this point. For the moment, PW is the winner among big losers, but he is still at serious risk here and I honestly don't see how BBRY isn't done now. No real way out of them except as a very small niche player and even then, I think this news will kill any potential deals that were in the works for enterprise or gov't contracts. JHMO.............

Take Q2 E.R, add $1Billion + $0.5 Billion tax refund, minus $0.5 Bil (est) for latest restructuration and then, rethink the situation and the SP.
Basically, we're back to Q2 with $1Billion more to play around and raise partnerships. FF may not be alone and this may not be the last round.

I said it could be complex. Well ... it is.

[Shanerredflag]

I wonder why they need that 1 B? I would have thought last ER's write down would have sufficed. Or, perhaps that is just a way for PW to extract more return for his continued support?

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