[spiller]

I don't think it's about being confident in the company, it's more of the public image that concerns me. BlackBerry's been beaten down so many times, I don't know what to think and who to believe. This is why commenting daily on a public forum regarding BBRY day trading doesn't make sense to me anymore simply because BlackBerry, even a mere 11 months ago, was thinking long term and not short. I believe all this was anticipated some how, we (the longs) just have to play the game sensibly and calmly. We're talking about a multi billion dollar company, they're not inept.

I said it before and I'll say it again, I'm BBRY long till it dies. It didn't go private and I'm glad, because there's money to be made. It might not be today, or in the next month, but the value is there, the quality of the phones is there, the right OS is there.

They're not inept?

"We are exiting the consumer business and focusing on enterprise and prosumer"

two days later "We are NOT exiting the consumer business"

"We are for sale"

talk of bids by parties other than fairfax and then "We are not for sale. We are giving Prem 6% a year on another 250M from him."

Yes there is value. But I'm done playing along with the incompetant board and incompetant managers. Two great articles on SA today.

The early ER was a punch to the face.

How this turned out was a severe beating. And yet I'm thinking of doubling down at this SP. Sucker for punishment.

I'll take a hostile takeover at $10 bucks now. The BOD, TH, and Prem and conspired and started a game of chess with novice moves and ended up getting beat badly.

[morganplus8]

Well, I finally had a few moments to look into all of this mess, thanks Prem. Rather than try to read through all of the comments here I'll just take a stab at it as I see it.

The Good News:

1) We have new management.

2) No one has to pay Prem for the $ 262 million breakup fee. In addition, 5:00 PM will likely pass without him having any second thoughts about taking the company private. That clears the way for the bidding process to begin.

3) We are now priced at post Q2 levels without Prem dirtying the waters any more.

4) Heins will likely be gone without the $ 55 M handshake.

5) The company is ready to explore new ideas under some new talent. So far, it is nice to see those empty seats.

All of this is positive to me. There is a possibility that 2 weeks from now, we will see some convertible debt issued if we don't see an offer from any of the tire kickers. I'll call this a neutral achievement because it brings some negatives along with it. Prem is just another guy now, with only slightly more shares than Mike L and his guy, they (meaning Mike and guy) can invest less than $ 80 M today, or 12M shares at today's price and surpass Prem's ownership. They have to feel good that Prem will likely have a breakeven of $ 14.75/shr if the bonds go through and no chance of that crazy $ 262 M pay off. He didn't do anything for that did he?

So I ask myself, if I were Mike, why wouldn't I stick to my plan of buying the company, step into the market today, purchase 12 M shares, announce I want the company for between $ 7.50 - $ 10.00/shr and take away everything Prem has left to offer. An offer under $ 10.00/shr kills the bond deal in its tracks, i.e., the bond offer fails to go through and Mikey gets the company for much less than he thought he might have to pay 24 hours ago. Is Mikey onside with Prem's deal? I would think not. Can BBRY be purchased as it is with the "new plan" in place? It sure can, all publically traded companies can be purchased. Mike can come back with the same offer as Prem did, $ 9.00/shr plus a breakup fee. If the board doesn't like it, he or any company in the world can commence buying shares in the open market and place their people on the board and hire a new CEO. The door is wide open to a deal now. How few shares did it take Icahn to place his own people on the BOD? Not many, 15 - 20% of the shares to basically take back the company. So who bought up all of the shares today?

[OMGitworks]

They're not inept?

"We are exiting the consumer business and focusing on enterprise and prosumer"

two days later "We are NOT exiting the consumer business"

"We are for sale"

talk of bids by parties other than fairfax and then "We are not for sale. We are giving Prem 6% a year on another 250M from him."

Yes there is value. But I'm done playing along with the incompetant board and incompetant managers. Two great articles on SA today.

The early ER was a punch to the face.

How this turned out was a severe beating. And yet I'm thinking of doubling down at this SP. Sucker for punishment.

I'll take a hostile takeover at $10 bucks now. The BOD, TH, and Prem and conspired and started a game of chess with novice moves and ended up getting beat badly.

If there were no takers at 9, why do you think 10 would fly? I think PW just keeps doubling down an dis shocked when he gets a deuce instead of an ace. Each time you could argue he did what was necessary to protect his investment and BBRY, but the LOI and now the debt seems one sided to his favor. I think that is the price BBRY has to pay because they are out o options and have zero leverage.

[peter9477]

I'd be worried about instant dilution once you get above 10. We need to see the details but if they convert to shares, the existing shareholders almost always are diluted, brings EPS and other metrics down in a single move. There is some wiggle room hear, but the conversion will hurt the stock price under normal circumstances.

Still makes little sense to me. By the time that would matter to anyone -- and let's say it's exactly at $10 even though we both know it would be well above -- that means the price would be at least 25% higher than it was at closing on Friday, let alone where it is now. Few of the current shareholders would really begrudge these new investors their extra shares, given that the only way we probably get there is with their investment.

[spiller]

The stock is down because of the risk of shareholder dilution.

Investors should always assume that a conversion will happen so we should not pretend that there are 514.61 million shares any more. It should be treated as though an extra 100 million exist. So an increase of 19.4%. The stock should be down about that much. Is it?

Posted via CB10

Why should the stock be down that much?

If we exlude the market forecasts - Blackberry would be worth 1B more today than yesterday. The 1B is converted at $10/share so the average SP should increase.

If there was no 1B added to the books, and 20% dilution, then yes SP down that much.

[spiller]

If there were no takers at 9, why do you think 10 would fly? I think PW just keeps doubling down an dis shocked when he gets a deuce instead of an ace. Each time you could argue he did what was necessary to protect his investment and BBRY, but the LOI and now the debt seems one sided to his favor. I think that is the price BBRY has to pay because they are out o options and have zero leverage.

No takers at 9 because they did not want to pay prem the breakup fee. Now that the LOI is expired, no breakup fee. If Prem solidified at 9 I think we'd see those other offers starting to come in. Like Morgan says, nothing is stopping someone from trying to buy the company, but now it might have to be a hostile takeover since Prem has control right now. What is a 40% premium to the SP right now. $10 bucks? That would probably do it.

[chr1sny]

Longs going to long. Keep up the positive spin fellas. One question I have for the longs is do you think Prem ever intended to follow-through on his 9$ offer?

Didn't he assure everyone he would get the financing?

[fin2007]

Why should the stock be down that much?

If we exlude the market forecasts - Blackberry would be worth 1B more today than yesterday. The 1B is converted at $10/share so the average SP should increase.

If there was no 1B added to the books, and 20% dilution, then yes SP down that much.

It has nothing to do with dilution, there is no dilution before it hits $10.

People just have no confidence on this co and its product. In the future, bbry may be able to compete on MDM field(BES software) and a very niche hardware market(like government).

I would guess the new guy will slowly wind down the phone buz and get rid of the component contract obligations, meanwhile get some tax refund.

In the end, it still has to sell itself.

[randall2580]

I don't think you will see anyone act until after the next earnings report - if they do. Can't lose sight of what was motivating the current BOD to do all that they have done recently - they never wanted to have to make the next earnings report. The potential buyers all had a look at the money coming in and out of the company - and have a very good idea what the next ER will be.

Today did not help that report one bit. I do not expect they sold any phones with today's announcements.

[OMGitworks]

No takers at 9 because they did not want to pay prem the breakup fee. Now that the LOI is expired, no breakup fee. If Prem solidified at 9 I think we'd see those other offers starting to come in. Like Morgan says, nothing is stopping someone from trying to buy the company, but now it might have to be a hostile takeover since Prem has control right now and an SP in the 6's. What is a 40% premium to the SP right now. $10 bucks? That would probably do it.

I am not really sure about that. DO you really think if Prem had said yes other companies would be lining up to take out BBRY. Where are they today? They weren't paying the break-up fee, BBRY was with their money. We just don't know how close PW was or wasn't to pulling the trigger at 9. Did the books scare him? Did the last 30 days scare him? Could he not get the money? Was it a sham all along? We just don't know. If somebody came in and bid $9 would the BoD accepted it and ate the breakup fee as the cost of selling the company? Seems like that might have happened based on what looks like no other better offers right now and the SP in the 6's. Is PW the saviour or the executioner? I admit, I don't know. I do know each successive deal gets better and better for him. I do know that he is the only one willing to put his $$ on the line when BBRY needs it the most.

[fin2007]

No takers at 9 because they did not want to pay prem the breakup fee. Now that the LOI is expired, no breakup fee. If Prem solidified at 9 I think we'd see those other offers starting to come in. Like Morgan says, nothing is stopping someone from trying to buy the company, but now it might have to be a hostile takeover since Prem has control right now. What is a 40% premium to the SP right now. $10 bucks? That would probably do it.

If Mike L/Cerberus were really interested, they would not care about the 165M breakup fee, because any takeover need get PW's approve anyway.

[fin2007]

I am not really sure about that. DO you really think if Prem had said yes other companies would be lining up to take out BBRY. Where are they today? They weren't paying the break-up fee, BBRY was with their money. We just don't know how close PW was or wasn't to pulling the trigger at 9. Did the books scare him? Did the last 30 days scare him? Could he not get the money? Was it a sham all along? We just don't know. If somebody came in and bid $9 would the BoD accepted it and ate the breakup fee as the cost of selling the company? Seems like that might have happened based on what looks like no other better offers right now and the SP in the 6's. Is PW the saviour or the executioner? I admit, I don't know. I do know each successive deal gets better and better for him. I do know that he is the only one willing to put his $$ on the line when BBRY needs it the most.

No, it is not.
If Mike really wanted to make offer, say he can offer at $9.2 instead of $9.5 and PW will happily accept that because 30 cents means $3 per share for him.

But now if Mike wants to bid at $9.2, PW could just simply vote "NO".

[OMGitworks]

Still makes little sense to me. By the time that would matter to anyone -- and let's say it's exactly at $10 even though we both know it would be well above -- that means the price would be at least 25% higher than it was at closing on Friday, let alone where it is now. Few of the current shareholders would really begrudge these new investors their extra shares, given that the only way we probably get there is with their investment.

Existing shareholders who rode the SP from today's 6 and change to 10 would absolutely begrudge the dilution that came when they got to 10. It's a large dilution of about 10%. They would and should hate the dilution. Don't expect them to be grateful for it, that isn't how the stock market works. Gee thanks, please take 8-10% of my money??? Can't see them liking that at all.

[peter9477]

If Mike L/Cerberus were really interested, they would not care about the 165M breakup fee, because any takeover need get PW's approve anyway.

Not so. With the previous arrangement if the board had received an offer from anyone else and officially deemed it a "superior offer", then Fairfax was constrained by the terms of the deal to vote in favour of that offer. They had no options in that respect. At least, that's what the text of the agreement clearly stated.

[spiller]

It has nothing to do with dilution, there is no dilution before it hits $10.

People just have no confidence on this co and its product. In the future, bbry may be able to compete on MDM field(BES software) and a very niche hardware market(like government).

I would guess the new guy will slowly wind down the phone buz and get rid of the component contract obligations, meanwhile get some tax refund.

In the end, it still has to sell itself.

You missed this part: "exclude the market forecast" meaning confidence in the company today vs yesterday, future sales, etc.

Math says you just don't dilute the SP 20% due to the new deal. If you do dilute it 20% that means the 1.25B is converted from debt to stock, it adds 1.25B to the balance sheet and at the same time dilutes the shares by 1.25B / $10. The dilution is equated with the increase in cash in the company so the SP shouldn't change. That was my point.

The stock is down 16% because Mr. Market said if the deal fell through the stock would trade between 5 and 7 dollars. So that is was it is doing today. Nothing to do with the 1 to 1.25B.

[peter9477]

Existing shareholders who rode the SP from today's 6 and change to 10 would absolutely begrudge the dilution that came when they got to 10. It's a large dilution of about 10%. They would and should hate the dilution. Don't expect them to be grateful for it, that isn't how the stock market works. Gee thanks, please take 8-10% of my money??? Can't see them liking that at all.

But I thought we were talking about why the stock dropped so much today?

How can you explain the drop by saying that those who bought at the bottom (i.e. after it dropped) would hate the dilution that would occur?

Sorry, still not getting it. Honestly though, I don't suppose we have to sort this out... I'm pretty sure we're talking about a difference in opinion here, at some level, and not facts, so it's pretty unimportant that you and I see eye to eye on it. No big deal.

Edit: Oh, I think you changed topic on me and focused on my "few of the current shareholders" comment. I was referring to those who were shareholders already, not the new ones who just arrived at <$6.50 territory.

If we ignore that bit of ambiguity on my part, wouldn't you agree with my thought that this possible future dilution would come with such an upside for those who bought before today that they really won't mind it compared to the alternative (i.e. the stock still being well below $10)?

[spiller]

I am not really sure about that. DO you really think if Prem had said yes other companies would be lining up to take out BBRY. Where are they today? They weren't paying the break-up fee, BBRY was with their money. We just don't know how close PW was or wasn't to pulling the trigger at 9. Did the books scare him? Did the last 30 days scare him? Could he not get the money? Was it a sham all along? We just don't know. If somebody came in and bid $9 would the BoD accepted it and ate the breakup fee as the cost of selling the company? Seems like that might have happened based on what looks like no other better offers right now and the SP in the 6's. Is PW the saviour or the executioner? I admit, I don't know. I do know each successive deal gets better and better for him. I do know that he is the only one willing to put his $$ on the line when BBRY needs it the most.

Yes. I do. Maybe Mike hates Prem so much he didn't want to give Prem the $3 average down on his shares from the 150M if he put in his bid today (before a confirmed offer from Prem at which time it would be 250M).

Mike could always go public tomorrow and say he is looking at offering $9 / share for the company and if the BOD isn't listening move hostile.

A few things don't add up. Mike L saw the books. Cerberus saw the books. Did Mike L and Cerberus form a legal entity preparing for a bid? I can't recall. If they did that would indicate the books aren't so bad and they were serious about a bid. Else why go to the trouble? Mike L and Fregin certainly DID put their entity together, but that is less of a deal to consider than if they also had Cerberus added as a partner on paper.

[greggebhardt]

Longs going to long. Keep up the positive spin fellas. One question I have for the longs is do you think Prem ever intended to follow-through on his 9$ offer?

Didn't he assure everyone he would get the financing?

I think he had all the intentions in doing so but lacked the ability to get "other peoples" money to do so. He had much to gain if he could have sealed the deal. Do not know where we are at now. BB says they are not interested in selling but . . . . . if someone came along?

In the mean time they need to carry though with their new business model and hope the new BOD can breth some life in BBRY

[fin2007]

You missed this part: "exclude the market forecast" meaning confidence in the company today vs yesterday, future sales, etc.

Math says you just don't dilute the SP 20% due to the new deal. If you do dilute it 20% that means the 1.25B is converted from debt to stock, it adds 1.25B to the balance sheet and at the same time dilutes the shares by 1.25B / $10. The dilution is equated with the increase in cash in the company so the SP shouldn't change. That was my point.

The stock is down 16% because Mr. Market said if the deal fell through the stock would trade between 5 and 7 dollars. So that is was it is doing today. Nothing to do with the 1 to 1.25B.

I did not say the drop is caused by dilution, instead I said it had nothing to do with dilution.

People just do not have confident on the co's future. It is just so tough to fight against COs like Apple/Samsung/Google/MSFT.

[fin2007]

Yes. I do. Maybe Mike hates Prem so much he didn't want to give Prem the $3 average down on his shares from the 150M if he put in his bid today (before a confirmed offer from Prem at which time it would be 250M).

Mike could always go public tomorrow and say he is looking at offering $9 / share for the company and if the BOD isn't listening move hostile.

A few things don't add up. Mike L saw the books. Cerberus saw the books. Did Mike L and Cerberus form a legal entity preparing for a bid? I can't recall. If they did that would indicate the books aren't so bad and they were serious about a bid. Else why go to the trouble? Mike L and Fregin certainly DID put their entity together, but that is less of a deal to consider than if they also had Cerberus added as a partner on paper.

He can not, PW alone could vote down any offer.

[Superfly_FR]

Thanks, I just think it is dangerous to try to spin this as being somehow positive. I "only" lost a few hundred dollars, but I suspect I am one of the lucky ones on that score. It's just that BBRY is looking more and more dead as I look at it with my BBRY glasses off. Time (and alcohol) usually temper all!!! If Chen rescues BBRY it will be one of the greatest corporate comebacks, ever and that will be worth drinking to as well!

Let me say it again. BlackBerry still alive at this point may not have been appreciated enough by those pointing their fingers to Heins & Boulben, as they were to Mike an Jim (probably half of them having saluted the Mike possible comeback, ironically). Remember the trend, the hype, the press, the analysts ... BB10 was DOA and BBRY a falling knife, toxic by nature.
I don't pretend Heins & Boulben did the "miracle" we may have thought they'd deliver. They didn't. But almost 3 years ago now, when I stated I'd buy a few shares (5, actually whot turned out to be 50 then ... you know the story ) all I got from any front (I mean even here or my closest friends circle) was "you're either stupid or blind. They'll be dead within weeks". I'm counting about 140 weeks from then and none without this type of comment, numerous times a week. And we're still here, now talking again about future and figures.

I'm stubborn Capricorn: I support BlackBerry and I bought BBRY shares I'll hold unless major accident in my life urges me to sell. Because I believe in the enterprise superior offering and won't resign to feed some devils I personally hate (I won't expand about it).

Let's beat the market at the end, because as an individual, I have no chance to win on short term positions. IMHO.

[timmy t]

They're not inept?

"We are exiting the consumer business and focusing on enterprise and prosumer"

two days later "We are NOT exiting the consumer business"

"We are for sale"

talk of bids by parties other than fairfax and then "We are not for sale. We are giving Prem 6% a year on another 250M from him."

Yes there is value. But I'm done playing along with the incompetant board and incompetant managers. Two great articles on SA today.

The early ER was a punch to the face.

How this turned out was a severe beating. And yet I'm thinking of doubling down at this SP. Sucker for punishment.

I'll take a hostile takeover at $10 bucks now. The BOD, TH, and Prem and conspired and started a game of chess with novice moves and ended up getting beat badly.

Is $15 million a year a real big deal?

[timmy t]

No he cannot.

[OMGitworks]

But I thought we were talking about why the stock dropped so much today?

How can you explain the drop by saying that those who bought at the bottom (i.e. after it dropped) would hate the dilution that would occur?

Sorry, still not getting it. Honestly though, I don't suppose we have to sort this out... I'm pretty sure we're talking about a difference in opinion here, at some level, and not facts, so it's pretty unimportant that you and I see eye to eye on it. No big deal.

Edit: Oh, I think you changed topic on me and focused on my "few of the current shareholders" comment. I was referring to those who were shareholders already, not the new ones who just arrived at <$6.50 territory.

If we ignore that bit of ambiguity on my part, wouldn't you agree with my thought that this possible future dilution would come with such an upside for those who bought before today that they really won't mind it compared to the alternative (i.e. the stock still being well below $10)?

Fair enough we are missing each other's points, ask my wife, I do that a lot, apparently... . I don't think today is due to dilution, I think the lack of Buyers and them taking on $1B in debt on pretty bad terms (high interest rate nad conversion) are tanking the stock.

Most of all, I think them taking on the debt and no buyers coming forward is telling Wall Street the numbers are bad and that they are burning thru cash and will need more to keep the company afloat while they try to salvage it. Just speculation on my part of course.

[njblackberry]

@Superfly - your optimism (apparently ever present) is admirable. If I was losing my money on a stock I am not sure I would be so optimistic.