View Poll Results: Did you buy shares ?

Voters
1104. You may not vote on this poll
  • Yes, I'm acting now !

    693 62.77%
  • No

    411 37.23%
  1. BanffMoose's Avatar
    What! My BB10 Passport didn't make the cut? Have to file a complaint to the writer. Lol
    Go ahead. That's being "productive" which is what your Passport makes you. LOL
    bbjdog, theRock1975, Corbu and 1 others like this.
    08-26-16 06:58 PM
  2. masterful's Avatar
    Don't know how is blackphone is on the list when they got hacked!

    Posted via my BlackBerry PRIV
    CDM76 likes this.
    08-26-16 07:06 PM
  3. bbjdog's Avatar
    Go ahead. That's being "productive" which is what your Passport makes you. LOL
    Thanks for the correction. My BlackBerry Passport is not the most secure phone, it's only for productive use. What was I thinking! lol

    My BlackBerry Passport is not the most secure phone nor is it productive when I use it and it's not the best OS out there, so why do I have one? Oh! I remember, selfies.
    CDM76 and OlympusMons like this.
    08-26-16 07:12 PM
  4. Corbu's Avatar
    BlackBerry announces plan to raise US$605 million through debenture sale | Financial Post

    BlackBerry Ltd. announced Friday plans to raise US$605 million through the sale of convertible debentures to Fairfax Financial Holdings Ltd. and a group of institutional investors.

    The Waterloo-based smartphone manufacturer also said it will recoup about US$1.25 billion in outstanding 6 per cent debentures on Sept. 2.

    The new debt BlackBerry intends to issue will have a 3.75 per cent interest rate and come due in November 2020. The company has entered into an agreement with Fairfax and a group of investors, which will subscribe to the new 3.75 per cent unsecured convertible debentures of the company on a private placement basis. FairFax is Blackberrys second-largest shareholder, after Primecap Management, and has a stake of about 8.9 per cent.

    According to BlackBerry, if the US$605 million of new debt were converted to stock it would represent about 11.57 percent of its outstanding shares.

    The restructuring of our convertible debt will enable us to significantly reduce our interest expense and potential future dilution for our shareholders, Blackberrys CEO John Chen said in a media release. I am pleased that Fairfax will continue as BlackBerrys leading lender, reinforcing its ongoing commitment to the company as we continue to execute on our strategy of pursuing growth and sustainable profitability.

    A spokesperson for Blackberry told the Financial Post that the company will not be making any further comment.

    The trading of shares of the company were briefly halted Friday afternoon, in Toronto on the TSX and in New York on the Nasdaq, before it announced the convertible debenture redemption and the new issuance.

    The Waterloo-based mobile phone and software company has struggled to stay afloat in the evolving smartphone market. It recently pivoted its business to emphasize software, and doubled its software revenue on a year-over-year in the first fiscal quarter.

    BlackBerry posted a loss of US$690 million in its most recent quarterly financial reports. That its hemorrhaging money isnt news either: the company lost US$238 million in the previous quarter and US$89 million in the quarter before that.

    While the company has kept a rosy public face, its underlying financials havent given much cause for optimism.

    In 2009, the company had 20 per cent of the smartphone market share, which has since fallen to 1 per cent. Its handset division sold 500,000 phones last quarter, or about 100,000 fewer than the quarter before. At its peak, Blackberry was selling millions of phones every quarter.

    Since late July, BlackBerry shares have risen to their highest levels since spring, hovering around US$8 on the NASDAQ. The company was rated by Raymond James Financial as outperform, who boosted its price target to US$10.50 from US$8. With shares where they are, there could be nearly 30 per cent in upside if Raymond James estimates bear out over time.

    The companys Nasdaq listed shares are down US$14.71 in 2016. Its stock was trading at $10.28 before shares were halted on the TSX.
    masterful, rarsen, bbjdog and 1 others like this.
    08-26-16 08:20 PM
  5. Corbu's Avatar
    'All sorts of doors' open as BlackBerry restructures debt: analyst | CTV Kitchener News

    BlackBerry’s announcement that it will be restructuring its debt is “smart financial management,” one tech industry analyst says.

    “It gives BlackBerry even more runway as it continues to manage its way through what’s become a very protracted transition period,” CTV technology analyst Carmi Levy said Friday.

    BlackBerry announced Friday that it will be redeeming US$1.245 billion worth of unsecured convertible debentures, which can be converted into shares in the company at a price of US$10 per share.

    Additionally, the Waterloo-based company said that it had signed a deal with its second-largest shareholder, Fairfax Financial Holdings, as well as other investors to raise US$605 million in new convertible debentures, which will come due in 2020.

    If all of those debentures were converted into shares, they would represent about 11.57 per cent of the company’s total shares outstanding.

    In a statement, BlackBerry CEO John Chen said the restructuring would let the company “significantly reduce our interest expense and potential future dilution for our shareholders.”

    Levy praised Chen for keeping his eye on BlackBerry’s balance sheet during a time of “growing speculation” of a possible takeover attempt, despite denials by the company.

    “The rosier outlook definitely opens up all sorts of doors that were once closed, and I’d expect today’s announcement to further spur this kind of talk,” he said.

    Best known for its handset manufacturing business, BlackBerry has been trying to diversify its options in recent times.

    Last month, it unveiled plans for the DTEK50 – which it said would be the most secure Android smartphone available – and followed that up by releasing some of its apps into the Google Play store.

    The company has also made acquisitions with eyes on the Internet of Things field and cybersecurity consulting.
    masterful, rarsen, bbjdog and 2 others like this.
    08-26-16 08:22 PM
  6. Corbu's Avatar


    Amber Kanwar Verified account
    ‏@amberkanwar Amber Kanwar
    Fairfax average purchase price for BlackBerry about $16.50US if looking at 13F filings. That is just the equity
    alludba, bbjdog, rarsen and 1 others like this.
    08-26-16 08:26 PM
  7. DaSchwantz's Avatar
    I told you all there would be another issuance to keep Fairfax in the Captain's Chair. The interest rate is a lot better for BBRY this round, and it appears to be held even closer to the chest this time.

    Posted via CB10
    08-26-16 09:33 PM
  8. Andrew4life's Avatar
    How come when these debentures were announced, there was something like a 15-20% drop the day after if my mind recalls correctly, but now that half are retired, the rest renewed at better rates, there are crickets?

    I never understood that drop, the net asset value of each share didn't change, but the market acted as if 25% more shares were written into existence, diluting their own.
    It was probably related to the perception of how badly they needed money. You don't usually ask for a billion dollar loan unless you expected to burn a lot of cash. So people thought if BlackBerry was asking for a billion in cash, they would be burning more cash.
    It seems like in the end, the debt was really more of an insurance policy so if they did need the money, they will have enough. Remember, if a company doesn't have enough cash to pay all their short term debtors, they'd basically have to file for bankruptcy.



    Posted via CB10
    alludba likes this.
    08-26-16 09:45 PM
  9. _dimi_'s Avatar
    The 'we have over 2.5 billion in cash' statement to their clients was worth a lot more than the cost of it, 75 mio in interest payments. If the new debt comes with a conversion clause, than I think we all have to assume that these WILL get converted into shares eventually, diluting ours. Or that's what I 'hope', since I really don't want to stay below 10 USD until 2020!

    Any thoughts from our guru, Morgan?!

    Posted via CB10
    Corbu, alludba, rarsen and 2 others like this.
    08-27-16 05:36 AM
  10. b121's Avatar
    Just like it is for all of us, anytime you can pay down debt its a good thing. Here, they paid down debt and refinanced the rest at a much lower interest rate. Nothing bad here. The original 6% bonds gave BlackBerry extra cushion in case they needed it, and turns out they didn't (or at least I don't think they did). If it weren't for the patience the market gave John Chen, it could easily have gone the other way. The new debt appears to have the same conversion terms as the original debt, so I think it's meant to be neutral.

    As getting debt without the conversion option, this article may help (or may not):
    https://finance.yahoo.com/news/wonde...160000020.html
    Thank you for sharing this article.

    (7250 -> 8703e -> 9530 -> 9550 -> 9650 -> 9930 -> PlayBook -> Z10 -> Z30 -> Classic -> PRIV)
    08-27-16 08:16 AM
  11. bspence87's Avatar
    The 'we have over 2.5 billion in cash' statement to their clients was worth a lot more than the cost of it, 75 mio in interest payments. If the new debt comes with a conversion clause, than I think we all have to assume that these WILL get converted into shares eventually, diluting ours. Or that's what I 'hope', since I really don't want to stay below 10 USD until 2020!

    Any thoughts from our guru, Morgan?!

    Posted via CB10
    If I understand correctly, they cannot be converted until expiry, so BlackBerry has the option of buying them out before then if the share price goes over $10.

    Please correct me if I'm wrong!

    Ideally, BlackBerry will make $600million profit before then, and be able to buy them out.

    Posted via the CrackBerry App for Android
    08-27-16 10:02 AM
  12. _dimi_'s Avatar
    If I understand correctly, they cannot be converted until expiry, so BlackBerry has the option of buying them out before then if the share price goes over $10.

    Please correct me if I'm wrong!

    Ideally, BlackBerry will make $600million profit before then, and be able to buy them out.

    Posted via the CrackBerry App for Android
    "The 3.75% Debentures will be convertible into common shares of BlackBerry at a price of USD$10.00 per Common Share and will be due on November 13, 2020. Based on the number of Common Shares currently outstanding, if all of the USD$605 million of 3.75% Debentures were converted, the Common Shares issued upon conversion would represent approximately 11.57% of the Common Shares outstanding after giving effect to the conversion. The other terms of the 3.75% Debentures are substantially identical to those of the 6% Debentures, except that the 3.75% Debentures are not redeemable prior to maturity"

    This time they are not redeemable prior to maturity - so if the stock is above 10 USD on November 13, 2020 - it seems to me that they will definitely convert into common shares...?

    Posted via CB10
    08-27-16 11:57 AM
  13. davemason2k's Avatar
    Diluting shares is NOT a good thing
    08-27-16 04:17 PM
  14. bbjdog's Avatar
    08-27-16 07:02 PM
  15. Fret Madden's Avatar
    [info]Don't forget to post content with your links gentlemen; there's been a few here and there of late![/info]
    08-27-16 10:05 PM
  16. tmurphx5's Avatar
    Diluting shares is NOT a good thing
    I may be wrong but any potential dilution likely happened with the first issuance two, or was it three, years ago

    Passport running on 10.3.2. 2876
    08-28-16 07:46 AM
  17. Seadog83's Avatar
    It was probably related to the perception of how badly they needed money. You don't usually ask for a billion dollar loan unless you expected to burn a lot of cash. So people thought if BlackBerry was asking for a billion in cash, they would be burning more cash.
    I always thought that the whole thing was a little superfluous given that they never really needed the cash, never alluded to needing cash, and their position remained strong throughout. Maybe just with the benefit of hindsight... Regardless of the reasoning, why is it that there was a huge drop on issuance, but no prorated gain on half redemption + better rates on the rest?

    I may be wrong but any potential dilution likely happened with the first issuance two, or was it three, years ago
    There's been no dilution yet. The debentures are the *option* to dilute. So the *potential* dilution has been cut in half. Which is likely a good thing. As to the actual effect of the dilution, that is a function of stock price. This isn't as if stocks are being written into existence, stealing them from us. If in 2020, the stock price is at $10, then it will have little effect o stock price. It will regardless dilute any future profits by ~10%.

    The actual dilution on stock price if it happens will be ~10% of the difference between $10 and whatever the stock price is in 2020. It only happens if we're above $10, which sad to stay is still a decent step up from here.
    Bacon Munchers likes this.
    08-28-16 10:22 AM
  18. morganplus8's Avatar
    The 'we have over 2.5 billion in cash' statement to their clients was worth a lot more than the cost of it, 75 mio in interest payments. If the new debt comes with a conversion clause, than I think we all have to assume that these WILL get converted into shares eventually, diluting ours. Or that's what I 'hope', since I really don't want to stay below 10 USD until 2020!

    Any thoughts from our guru, Morgan?!

    Posted via CB10
    It seems many of us are forgetting the history of this investment over the past 4 years. We have to remember that BlackBerry was bleeding money, they didn't have anywhere near the cushion they have today. (Most of BB's cash came after Chen joined and wrote-down inventory which produced tax credits, until then BB was low on cash) The stock was tanking, Prem Watsa stepped in to make an offer at $ 9.00/shr/US to take it off the market, subject to a review. The review didn't conclude with a buyout and privatization of the company but it did include a massive injection of cash and the appointment of John Chen! There, the 1.0 B in conv. debt financing came about to save the price of the stock from collapsing as the media and analysts were claiming that BB was go bankrupt within a couple of years, at the most. As time went on, the bond offering was over subscribed to the tune of $ 250 MM and that's where we are today. Prem Watsa did all of this, not to save a Canadian company from extinction, he did it to save his average price per share of $ 17.60/shr/US at that time. The company was vulnerable to a buyout for much less than he have in it and he needed to hold 10% or more of the stock to prevent a major loss. Prem literally saved his huge bet on BlackBerry back then.

    Today, John Chen, has talked to all of the bond holders and they have agreed to exchange, retire and to receive the blended penalty payment ahead of the iron clad date of November 13, 2016. Half the debt will go away for a little over one year's worth of interest penalty and the other half continues on at a yield of not just 3.75% but 3.75% plus the up front penalty of $ 40.6 MM bucks. That is giving holders an effective yield much higher than the stated return. They did nothing to gain this slightly lower yield, the paper is the same, the due date for redemption is the same, the conversion is the same, they just get a slightly lower yield, say, 5% for being there.

    John Chen retires debt well ahead of the due date, why would he care if it occurs on Sept. 2nd versus Nov. 13th? Why did he float $ 605 MM versus $ 600 MM? Funny things these decisions are, he wants it done in Q2 so he made sure that everyone who re-invests in the bonds get their allotment and potential share conversion down the road. If he does it once, he can do it again, that is, talk to the holders of bonds and redeem them early. He seems to be okay with a 60.5 MM share dilution which brings his float to well under 600 MM shares total with a share buy back still in place. The terms of both issues are the same, he clearly did this to reduce the potential dilution to the shareholders while feeling like he needed more money for acquisitions, I assume this of course. BB can operate on about $ 250 MM per year in cash, why would he need more than $ 1.3 B in cash let alone a bond offering and an additional $ 605 MM plus $ 500 MM in operating loans from the bank?

    I'm okay with the deal, it is costly but we knew that would be the case. You have to wonder why he feels he needs so much cash though. I believe that certain players wanted to retain a good portion of their investment in order to generate yield while waiting for capital gains. I don't know if he had a choice in the matter as Prem needs to lower his average cost per share. Prem could have stepped into the open market and purchased those shares but he owes it to his investors to generate yield. The company as a whole is now much easier to acquire, that's good news as we want the stock price to go up soon to reduce this from actually happening. I see it as a positive over all and see the stock doing well. Needless to say, I have been waiting for months to see what would happen as Chen had indicated he wanted all of those bonds back ASAP. That's my take on all of this.
    08-28-16 10:31 AM
  19. DaSchwantz's Avatar
    A couple of points about the new convertible deal:

    The old converts were trading above 106 before the new deal was announced, so it was going to cost some money to redeem them any way you slice it.

    The costs will be included in one time costs but will reduce ongoing interest costs, which should be good for cash flows, earnings, and share price eventually.

    Would like to know who is participating in the new converts...particularly any US firms...will see what I can find.

    Interesting that it was structured to not be convertible till expiry this time.

    Dilution via hedging (shorting) is cut in half, so hopefully this takes the edge off.

    If you want to follow the latest price of the converts,you can find it here:

    http://www.financialpost.com/markets...ebentures.html



    Posted via CB10
    08-28-16 02:19 PM
  20. morganplus8's Avatar
    Quick thought here, BB has $ 605 MM they don't need and a healthy share buy-back program, it makes sense for them to step up now and retire as much stock as they can at these levels. Perhaps Chen has done the math on this one ................. aside from that, an acquisition would be in order.
    08-28-16 02:34 PM
  21. fanBBRY's Avatar
    Quick thought here, BB has $ 605 MM they don't need and a healthy share buy-back program, it makes sense for them to step up now and retire as much stock as they can at these levels. Perhaps Chen has done the math on this one ................. aside from that, an acquisition would be in order.
    Morgan,

    Just curious, what gives the hint that an acquisition is a possibility? Because of the cleaning up of debt and removing some lenders?
    08-28-16 02:41 PM
  22. morganplus8's Avatar
    Morgan,

    Just curious, what gives the hint that an acquisition is a possibility? Because of the cleaning up of debt and removing some lenders?
    This is a beautiful little company that managed to mitigate all of its risk by becoming a HW designer. There is no risk in this name any more hence the bond call. Now what on earth do they need with $ 605 MM unless prior bond holders demanded an off-setting position to control common stock. I wanted him to call it all in and not place another round of financing. If they can run on $ 250 MM and $ 500 MM in credit, why carry so much cash unless you want to purchase more tech or you want to buy back stock at $ .75 on the dollar. Today at $ 8.00, it makes perfect sense to buy the stock and finance it at 3.75 %. I wonder if Chen will discuss this in detail one day. In a perfect world, you would hope he could make far more money, or return, on the $ 1.8 Billion he is forced to invest. Buy the stock back up to $ 10.00/shr or buy another source of revenue.

    “The restructuring of our convertible debt will enable us to significantly reduce our interest expense and potential future dilution for our shareholders,” Blackberry’s CEO John Chen said in a media release. “I am pleased that Fairfax will continue as BlackBerry’s leading lender, reinforcing its ongoing commitment to the company as we continue to execute on our strategy of pursuing growth and sustainable profitability.”

    A spokesperson for Blackberry told the Financial Post that the company will not be making any further comment."

    They could have wiped out much more dilution here so it appears that Prem wanted to hold conv. bonds in order for the deal as a whole to fly. Quite a job for BB to call all of the bonds in a couple of months ahead of their natural retirement date. Something must be up here.
    Corbu, fanBBRY, La Emperor and 9 others like this.
    08-28-16 02:55 PM
  23. _dimi_'s Avatar

    This is a beautiful little company that managed to mitigate all of its risk by becoming a HW designer. There is no risk in this name any more hence the bond call. Now what on earth do they need with $ 605 MM unless prior bond holders demanded an off-setting position to control common stock. I wanted him to call it all in and not place another round of financing. If they can run on $ 250 MM and $ 500 MM in credit, why carry so much cash unless you want to purchase more tech or you want to buy back stock at $ .75 on the dollar. Today at $ 8.00, it makes perfect sense to buy the stock and finance it at 3.75 %. I wonder if Chen will discuss this in detail one day. In a perfect world, you would hope he could make far more money, or return, on the $ 1.8 Billion he is forced to invest. Buy the stock back up to $ 10.00/shr or buy another source of revenue.

    The restructuring of our convertible debt will enable us to significantly reduce our interest expense and potential future dilution for our shareholders, Blackberrys CEO John Chen said in a media release. I am pleased that Fairfax will continue as BlackBerrys leading lender, reinforcing its ongoing commitment to the company as we continue to execute on our strategy of pursuing growth and sustainable profitability.

    A spokesperson for Blackberry told the Financial Post that the company will not be making any further comment."

    They could have wiped out much more dilution here so it appears that Prem wanted to hold conv. bonds in order for the deal as a whole to fly. Quite a job for BB to call all of the bonds in a couple of months ahead of their natural retirement date. Something must be up here.
    Hi Morgan. I agree, them redeeming these bonds just months ahead of the retirement date, is intriguing. Are they anticipating that price will be above 10 USD by then? Good quarterly results or is someone making a run for the company resulting in a share price above 10 USD and potential dilution complicating a potential deal?

    If JC had waited until November, couldn't he have retired all those bonds, without having to negotiate another deal with prior bond holders? Of course it could be that all he wanted was a war chest, just in case of, but wouldn't he have had alternatives like the 500 million USD credit line or a bond offering without a conversion clause?

    Anyway, I like your vision of a buyback but to me that doesn't sound like conservative Chen. I think their previous announcement has already ended - and it seems to me that they never did much with it except for countering dilution due to their employee benefit program.

    http://press.blackberry.com/en/finan...e-program.html

    Posted via CB10
    08-28-16 04:25 PM
  24. BanffMoose's Avatar
    John Chen retires debt well ahead of the due date, why would he care if it occurs on Sept. 2nd versus Nov. 13th?
    I'm just glad that he/they chose Sept 2nd this time around. That way they could announce this news BEFORE quarter end, unlike most quarters where they slip into the quiet period without saying anything, and then we get all worked up when we read rumors the week of the ER that the company wouldn't respond to because of the "quiet period."
    Corbu, La Emperor, rarsen and 2 others like this.
    08-28-16 04:33 PM
  25. DaSchwantz's Avatar
    I don't think there is anything major going on...this approach gives Prem what he wants and also gives Chen more control over EPS growth. There will be more buybacks and likely more Rev growth via takeovers. The big long suck from continued SAF declines is only going to be a factor for 1-2 more quarters, so comparables will all start improving very shortly. They are setting this up for institutional holding again, and it won't take too much longer to get there. The big question mark still hovers over the hardware side, but the comparables can't get any worse, so that ends up being just another cylinder to fire on.

    If any of the new convertible holders try to reestablish short positions, there may be a chance to buy more shares if price gets under pressure.....

    Posted via CB10
    Corbu, La Emperor and Mr BBRY like this.
    08-28-16 04:36 PM
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