08-29-16 07:32 PM
31 12
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  1. koool1's Avatar
    For those who are not financially savvy....

    This is a private placement Convertible Bond (debt) termination and re-issue where Blackberry is redeeming the current Convertible Bonds at 6% and simultaneously issuing new Convertible Bonds at 3.75%, which Fairfax has already agreed to fully subscribe. The Convertible option means the bonds can be "converted" to common shares at $10 USD per share, which is currently underwater, but may be a significant should the stock move higher on better earnings. Clearly 6% return was pretty good when you consider the Bank Rate is currently at .5%.

    This is marginally good news for Blackberry which will reduce it's interest payments by 2.25%, but I wonder what side deal Jon Chen had to agree to for Fairfax to let this happen. Remember, John is Fairfax's "creature" so I doubt John would do anything to disadvantage them. We won't know until either the company is sold or the stock gains become material and maybe we'll see a "surprise" dilution of the stock, for example.
    No side deal - these are convertible debentures. Holders will participate if BBRY is take out. That's the upside.

    Posted via BlackBerry PRIV
    08-27-16 02:59 PM
  2. anon(9721108)'s Avatar
    Well, Fairfax is just a giant Canadian octopus which has its tentacles in everything.

    They already own a big hunk of Blackberry.

    They have been known to sell companies piece by piece, but I think they've given BB time to get things together.
    08-27-16 07:41 PM
  3. JeddClampet's Avatar
    I don't know much about convertibles and debt restructuring, but if there is anyway we can interpolate this news into VZW will now give us PRIV owners the MM update, then by God, I'm all for it!!!!
    08-28-16 04:18 AM
  4. Troy Tiscareno's Avatar
    Sometimes the simplest explanation is the most accurate. The interest rate is dropping on the CD because the risk of default is falling and chance of stock appreciation is rising. It is good news on the long road to recovery.
    I agree. Chen has been able to grow the software side of the company and generate positive and growing revenues. This is a relatively low-risk (compared to the smartphone business) and high reward line of business that is doing well under his leadership, and should ensure a future for the company. Chen has also gotten the handset business to a financial situation that could be sustainable (though probably not profitable), vs. the massive ongoing losses that this line of business was sustaining since 2012. All of that is very positive for the company overall.

    Now, for CBers, especially those holding out hope for BB10, this is only confirmation that the Board and Fairfax are fully behind the dumping of BB10 and Chen's new program of mostly-outsourced, low-cost-to-the-company Android smartphone program.
    08-28-16 12:49 PM
  5. Dunt Dunt Dunt's Avatar
    I agree. Chen has been able to grow the software side of the company and generate positive and growing revenues. This is a relatively low-risk (compared to the smartphone business) and high reward line of business that is doing well under his leadership, and should ensure a future for the company. Chen has also gotten the handset business to a financial situation that could be sustainable (though probably not profitable), vs. the massive ongoing losses that this line of business was sustaining since 2012. All of that is very positive for the company overall.

    Now, for CBers, especially those holding out hope for BB10, this is only confirmation that the Board and Fairfax are fully behind the dumping of BB10 and Chen's new program of mostly-outsourced, low-cost-to-the-company Android smartphone program.
    Yeah I think the "Chen" haters only hope is if Chen gets a better job offer..... I think the Board and PW are happy with what he has managed to pull out of the fire.
    08-29-16 03:43 PM
  6. EchoTango's Avatar
    No side deal - these are convertible debentures. Holders will participate if BBRY is take out. That's the upside.

    Posted via BlackBerry PRIV
    With many years of M&A experience under my belt, I can assure you there are always side deals......
    08-29-16 07:32 PM
31 12

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