[timmy t]

If the stock rises back up to $18/share, I will take the 10% dilution.
If this deal makes the company look more secure to possible customers, it very well might be a good deal.
Depends on how it is viewed.

[timmy t]

What tire kickers? The company is now not for sale. Any buyout will be hostile.

[OMGitworks]

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.

I totally support your efforts and thoughts. This thread has passed many an hour for me and the people here for the most part are smart, decent and respectful posters.

Your support and dedication are truly admirable. At some point, today, I have to admit defeat and can't see any possible positive outcome. That's me and certainly doesn't make you wrong or me right. I will hold my options just in case. I was willing to lose all $500 and it seems I may have.

I support BBRY, I hold 8 massive options contracts controlling 800 shares that were worth $544 on Friday and $200 today!!

[JLagoon]

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.

Hi Morgan:

Are the retail shareholders, whose average is in the mid teens ($13 - $17), screwed completely (no way to reach break even) at this point? We have gone from $6 (last year) to $18 to $14 to $8 to $12 to $6. Throughout the sequence, the lack of upward movement is obvious. And any buying action appears to originate from momentum traders, and a small portion of shorts covering.

My understanding (please do correct me, if I am wrong):
- The company is, officially, not for sale anymore.
- Q3 ER in December could show faster cash burn rate (why did the company accept the $1 billion cash injection?).
- The cash injection will result in share dilution, when the SP reaches $10. Will this lower SP then?
- Any bid effort by Mike L. team will be below $10--to avoid share dilution.
- And any short, who has covered and made a nice profit could just pile up to short the stock again with an SP goal of below $6.

Except for a stellar Q3 ER or a big bid war, there does not seem any other reason for the SP to go back to the mid teen range. I think, at this point, there are more of the retail shareholders, who still like the company, but just want to break even at least.

Thank you.

[timmy t]

PW still only controls a minority of shares.

[njblackberry]

PW still only controls a minority of shares.

And has installed himself back on the board, and hand picked the CEO. Does it matter how much or how little he controls? No one else stepped up to the plate.

[the_sleuth]

It will be interesting to see how Prem Watsa and BOD defend themselves after another debacle for shareholders. Plethora of lawsuits will arrive on top of the ones announced in the last 6 weeks. My advice to retail investors is lawyer up.

Sent from my HTC One X+ using CB Forums mobile app

[kfh227]

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.

No, they took in debt. You can't simply say that the cash adds value anymore. You can only say that after dent elimination that there is so much cash. All you are left with is interest to pay and the risk of shareholder dilution.

Posted via CB10

[OMGitworks]

PW still only controls a minority of shares.

and is now in control of the Board of Directors and likely the new CEO and PW have a similar vision for BBRY. He's in control.

[OMGitworks]

No, they took in debt. You can't simply say that the cash adds value anymore. You can only say that after dent elimination that there is so much cash. All you are left with is interest to pay and the risk of shareholder dilution.

Posted via CB10

And $60M a year for debt service. Not massive, but it is $60M a year going for nothing positive.

[silversun10]

And has installed himself back on the board, and hand picked the CEO. Does it matter how much or how little he controls? No one else stepped up to the plate.

yes, it matters. any take over now needs approval by Prem...

[Dunt Dunt Dunt]

What tire kickers? The company is now not for sale. Any buyout will be hostile.

I would not believe everything that is coming out of BlackBerry. Just because they say they are not for sale, in order to stabilize their "sales" (bet their poor sales turned into nonexistent sales with the buyout looming). It does not mean that they would be a little more quite about any future offers until they were required by law to mention them.

[bigbbrybeliever]

If not mind, I will try to answer some of your questions:

Hi Morgan:

Are the retail shareholders, whose average is in the mid teens ($13 - $17), screwed completely (no way to reach break even) at this point? We have gone from $6 (last year) to $18 to $14 to $8 to $12 to $6. Throughout the sequence, the lack of upward movement is obvious. And any buying action appears to originate from momentum traders, and a small portion of shorts covering.

My understanding (please do correct me, if I am wrong):
- The company is, officially, not for sale anymore.
Yes.
- Q3 ER in December could show faster cash burn rate (why did the company accept the $1 billion cash injection?).
It may not so for the reasons listed below:
1. BB has $500 tax refund coming in;
2. The revenue recognition change in last Q will result some extra cash (or lot?) in this Q;
3. Depending on how the $1 billion written off in the inventory in the last Q, it may show that any Z10 sale during this Q will be pure profit (or cash) in this Q.
4. The massive lay-off has not start yet in this Q.
- The cash injection will result in share dilution, when the SP reaches $10. Will this lower SP then?
At current SP, the dilution is a good thing for the current share holders. It means that the share price will be above $10 at that time. For example, if I bought 2000 shares today at 6.50, then the share dilution kicking in, I already made $7000 or roughly 54%.
- Any bid effort by Mike L. team will be below $10--to avoid share dilution.
Since the company is not for sale anymore, so it become irrelevant now.
- And any short, who has covered and made a nice profit could just pile up to short the stock again with an SP goal of below $6.
I have no idea.

Except for a stellar Q3 ER or a big bid war, there does not seem any other reason for the SP to go back to the mid teen range. I think, at this point, there are more of the retail shareholders, who still like the company, but just want to break even at least.

Anything can happen for the SP going forward. Not long ago, NFLX was traded at $50 at that time, the market had priced it as dead house. Just look what its SP today.
If Chen can truly turn this company around with new initiatives and partnerships and the market thinks that the company not only alive but also have a good future then the SP can be any number that we cannot figure at this moment.

Thank you.

For the $1 billion convertible notes, my view is as follows:

Most likely, this is the condition made by Mr. Chen to have sufficient cash flexibility during the turnaround phase. Mr. Chen states that the turnaround will take six (6) Qs in which it may burn around $1 ~ $1.5 billion cash. In other words, at the end of six (6), the company should still maintain around $2.6 billion cash position that is needed to fulfill all the obligations in conducting the business.

[hasib123]

can we invite mr. carl icahn to the party

[Superfly_FR]

@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.

I totally support your efforts and thoughts. This thread has passed many an hour for me and the people here for the most part are smart, decent and respectful posters.

Your support and dedication are truly admirable. At some point, today, I have to admit defeat and can't see any possible positive outcome. That's me and certainly doesn't make you wrong or me right. I will hold my options just in case. I was willing to lose all $500 and it seems I may have.

I support BBRY, I hold 8 massive options contracts controlling 800 shares that were worth $544 on Friday and $200 today!!

Almost every single E.R has been a dramatic period. What we're living now is nothing but what would have happened during/after Q2 ER if there wasn't the FF affair. We've been through this numerous times and the SP is nothing but the translation of WS relative confidence. Relative to other brands, not even necessarily in the tech area, just companies or materials that have a better potential and/or lower risks.
That's my reading of the SP alone.

Therefore, while I see value in BB10, BES10 and BBM, I'm not worried much about the SP. And as I've invested money I may have burned in restaurant and not a penny more, I can afford to wait as long as necessary ... to be proven true, or lose a large part of my $ (I'm 10.35 avg X 1K).
I'm optimistic because of that. Besides this thread, nothing but my Z30 experience is driving my support. I enjoyed my Z10s (and Q5 and Q10) but there's nothing matching the Z30 in BB devices in my POV (witch is partial, of course). Why that ? Because that's the first BB10 device I don"t have to care about. No trick, no maintenance, no "do-this-do-that", it just works efficiently (radio & battery & sound) and I love its form factor. This is the first mature - while rushed out IMHO - BB10 device. And I think it's a very positive sign.

P.S: nothing admirable, but thank you both ... some warm never hurts !

[silversun10]

if Prem would have taken BB private, he could have made commercials like Victor Kame at Remington shaving machines way back. He liked his Phone so much he bought the Company...

[silversun10]

Almost every single E.R has been a dramatic period. What we're living now is nothing but what would have happened during/after Q2 ER if there wasn't the FF affair. We've been through this numerous times and the SP is nothing but the translation of WS relative confidence. Relative to other brands, not even necessarily in the tech area, just companies or materials that have a better potential and/or lower risks.
That's my reading of the SP alone.

Therefore, while I see value in BB10, BES10 and BBM, I'm not worried much about the SP. And as I've invested money I may have burned in restaurant and not a penny more, I can afford to wait as long as necessary ... to be proven true, or lose a large part of my $ (I'm 10.35 avg X 1K).
I'm optimistic because of that. Besides this thread, nothing but my Z30 experience is driving my support. I enjoyed my Z10s (and Q5 and Q10) but there's nothing matching the Z30 in BB devices in my POV (witch is partial, of course). Why that ? Because that's the first BB10 device I don"t have to care about. No trick, no maintenance, no "do-this-do-that", it just works efficiently (radio & battery & sound) and I love its form factor. This is the first mature - while rushed out IMHO - BB10 device. And I think it's a very positive sign.

P.S: nothing admirable, but thank you both ... some warm never hurts !

hey there Superfly, the way the news gets reported in the US media is horrendous. today is a real bad day for the reputation of BB. and it is all over, all day. it would be priceless advertising if it was positive, but it is not. so, you might want to consider that as well.

[Gesig Boek]

If Blackberry is going to be a going concern, they better start doing something about these Kantar numbers.

[spiller]

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.

We both agree. But you quoted me and started "It has nothing to do with dilution". It was stated like a rebuttal.

[Superfly_FR]

hey there Superfly, the way the news gets reported in the US media is horrendous. today is a real bad day for the reputation of BB. and it is all over, all day. it would be priceless advertising if it was positive, but it is not. so, you might want to consider that as well.

Hey there Silversun,
I noticed, but how could it be surprising ?
The only positive point of going private was going out of the radar... but now they have to deal with that. And so do I

Posted via CB10

[morganplus8]

Hi Morgan:

Are the retail shareholders, whose average is in the mid teens ($13 - $17), screwed completely (no way to reach break even) at this point? It is really difficult to see the stock trading much above the $ 10.00 mark with the dilution hanging over it. I see several comments today pinning the dilution at just 10%, it's much higher. There are 524 MM shares outstanding and some options. A $ 1B debt is equal to 100,000,000 shares and it is likely to grow to 125,000,000 as they dump $ 250 MM into it by December/2013. So the dilution is much more than 10%, let's get that straight. Generating breakeven earnings or slightly better numbers as they right size the business and produce what consumers want, will be that much harder to flow through to gains in the stock. I'm not sure why they would sell bonds right now, they should have given the company the option to sell those bonds and not force them to. Its a crummy way to get their hands on 125,000,000 shares don't you think? Why would Mike L put up with this nonsense? We can get to $ 15.00/shr if they can generate decent earnings via BES10.1 and smaller hardware sales. Remember they have 2 MM handsets at no cost right now. JP Morgan can go ahead with their BB 10/BES10.1 deployment. So that's some good news.


- The company is, officially, not for sale anymore.
BBRY management is not pursuing bids or partnerships at this moment but the company is always for sale. Now would be a great time for Mike to offer $ 9.00/shr, he would likely buy enough shares to effectively take over the BoD. You have to wonder where all of those 140,000,000 shares today, went to? He could kill the dilution of stock and control the company for not much money. I think he is looking at this for sure.

- Q3 ER in December could show faster cash burn rate (why did the company accept the $1 billion cash injection?).
Not sure I agree with this thought, the company wrote down handsets to nothing, they now own two quarters worth of free phones and the newest products which are starting to sell. They also have BES10.1 up and running as of Sept/23th and that's revenue now instead of being offered on trial. You are going to see Q!0 going full steam, the Z30 too, all of the BB 10's in even more countries and BES10.1 which held back conversions to BB 10, hitting the market in Q3. It might not look too bad. Point is, everyone thinks it will stink and is in the stock price today.

- The cash injection will result in share dilution, when the SP reaches $10. Will this lower SP then?-
Yes, this is true but the run to $ 10.00/shr can be lightening fast, it slows down after that by 20% of our former beta movement. We are seeing a bit of the effect of that bond offering because it is meant to assure companies like JP Morgan to go ahead and buy BB products. The market isn't very rational right now, we are trading at less than 12 month cash today. They have $ 2.6 B in cash plus Tax Benefits of $ 800 MM plus up to $ 1.25 B in bond funding for 650 MM shares outstanding. That adds up to $ 7.00/plus/shr in cash.

Any bid effort by Mike L. team will be below $10--to avoid share dilution.-
Indulge me for a minute, they would have had to pay Prem a breakup fee of $ 262 MM bucks, so 125 MM more shares of dilution is no different than offering everyone $ 12.00/shr today after Prem firms up his bid at $ 9.00/shr. So Mike will be indifferent to the bond cost up to $ 12.00/shr. Further more, he can start buying shares in the open market, like today, starting with 12 million shares (below 10% ownership) and do the deal for far less than his launching point if Prem had firmed up. You see what I mean? He can load up with far cheaper shares prior to his offer and lower the effect of the bond issue again. When the math is done, he is probably able to offer closer to $ 13.00/shr and still take on all of those bond shares. No big deal for him. Remember, other companies can do this as well. So it is important to hear from Mike regarding all of this.

And any short, who has covered and made a nice profit could just pile up to short the stock again with an SP goal of below $6.
Shorts sat for months on this risky deal to make an average of a buck, Not worth it. We give far too much credit to shorts today thinking they are making money because the stock dropped a buck. They might have spent that buck several times over just trying to hedge their position.

Except for a stellar Q3 ER or a big bid war, there does not seem any other reason for the SP to go back to the mid teen range. I think, at this point, there are more of the retail shareholders, who still like the company, but just want to break even at least.
You can't see mid-teens until BBRY comes up with a plan to stop the hardware bleeding, it will happen on its own as they approach zero production of handsets. Nature will take care of the cash bleed all by itself. If you have profits and future profits and growth, you get evaluations based on that growth. That's what we need to see and I only see breakeven results as they trim down here. BBM-X and security is where the future is at.

Thank you!!!!!!.

[plasmid_boy]

So it seems that we got most of what we wanted - downsized, BBRY staying public, more cash infusion, new CEO, BoD shakeup.
Now what? We have good phones and good OS, how do we get people to buy and use them?
How about making Android runtime seamless? I mean, how hard is it to make a native App for side-loading Android Apps?
Just make a GooglePlay App (like the BlackBerry World App) for BB10 and sideload Android Apps directly from our phones without users doing any extra work.

Chen is a good speaker, get him to do media rounds...

It sucks to see a large red number is my account, but this thread is still here and we are still talking about BBRY - not all bad...LOL

[spiller]

Is $15 million a year a real big deal?

The point is the flip flops. The confusion to the customers. It's like they are kids playing a game and keep changing the rules because they don't know what they are doing. Where is the central communications strategy? You can't mix messages to this degree and have your customers have faith in your abilities.

Consumers stopped buying handsets six weeks ago because they didn't know the end game here as they said they were for sale. More than ever now consumers will think they are going bankrupt and nobody wants to buy them they are in such bad shaped (true or not true - ask randoms on the street and this is the understanding of a high majority). Who knows how this has impacted BES customers. At least the Billion will say that Blackberry is around for a couple of years and they will remain customers. They need a partnership on hardware and then show profits at the ER more than one quarter in a row.

[spiller]

No, they took in debt. You can't simply say that the cash adds value anymore. You can only say that after dent elimination that there is so much cash. All you are left with is interest to pay and the risk of shareholder dilution.

Posted via CB10

On day one this is net ZERO. No 'real' impact on the balance sheet. 1B cash and 1B liability @ 6% a year (so some dollars impacting negative in interest over time). The point was, again, that if you are considering the 20% dilution then you have to consider the 'debt' fully converted to stock and no longer a debt. Until it converts this is no dilution, and when it converts it converts debt to stock taking liability off the balance sheet.

[Reed Richards]

Thanks to everyone for interesting comments this past week. I see some positive and negative from today, as probably most of you do as well.

Talking about handsets for a minute: I am very curious about Mr. Chen's plans for this division. I think they absolutely need a hardware partner to continue, and they also need to completely reboot the marketing. Act as if the BB10 launch never happened. Why? This weekend I showed my Z10 to four people, two of whom were U.S. Government employees. Each was legitimately impressed, and one was absolutely floored by it (I'm running 10.2). This woman loves her old BlackBerry, is very bright, and had NO IDEA that the Z10 existed... she had only heard about "a new keyboard phone" (the Q10). She was beaming about 10.2. It was a moment where I wanted to bang my head against the wall. It's not her fault that she had no idea about the phone or its capabilities, it's BlackBerry's fault. Time and again, I've seen that it's not so much that the phone was rejected... it's that it was either dismissed without people seeing it, or it was never known about.

I would love for BlackBerry to take those written-off phones and seed them throughout corporate and government offices. Let the product speak for itself.