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- But it's about the stock price. The debt covenants would be in place with any lender or debt issuer. The conflict of interest was the very thing shareholders had to agree to when they agreed to accept the loan from Watsa/Fairfax. He made the loan to protect his shares and by protecting his shares with his loan, he protected everyone's shares. Anyone else that wanted to loan money to BlackBerry could have countered with a better offer.. No one else did.Troy Tiscareno likes this.01-01-18 07:28 PMLike 1
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Imagine if Watsa owned a competing company and had management intentionally make BlackBerry fail -- but pretend to compete for avoid upsetting regulators -- so his other company would have a monopoly. He owns 100% of the other company and only 51% of BlackBerry so he wants to move all that business from Blackberry to his other company because he will make more money that way.
Do you think this would be legal just because he owns 51% of BlackBerry? How about legal for Chen as the CEO?
Posted via CB1001-02-18 01:37 AMLike 0 -
- How can you continue saying this? No, that is not correct.
Imagine if Watsa owned a competing company and had management intentionally make BlackBerry fail -- but pretend to compete for avoid upsetting regulators -- so his other company would have a monopoly. He owns 100% of the other company and only 51% of BlackBerry so he wants to move all that business from Blackberry to his other company because he will make more money that way.
Do you think this would be legal just because he owns 51% of BlackBerry? How about legal for Chen as the CEO?
Posted via CB10
In the end, this thread is about there being some alternative OSs out there for sale. Those that feel they are being left out by BlackBerry's move to end support for BB10 in a few years (combined with most everyone else's lack of supporting it). Users will now be free to see what other marginally supported and probable soon to be EOL products they can latch a hold of.anon(9803228) likes this.01-02-18 07:41 AMLike 1 - How can you continue saying this? No, that is not correct.
Imagine if Watsa owned a competing company and had management intentionally make BlackBerry fail -- but pretend to compete for avoid upsetting regulators -- so his other company would have a monopoly. He owns 100% of the other company and only 51% of BlackBerry so he wants to move all that business from Blackberry to his other company because he will make more money that way.
Do you think this would be legal just because he owns 51% of BlackBerry? How about legal for Chen as the CEO?
Posted via CB10
Hypothetical situations are the realm of arguments that can't be won on the basis of the real facts in real life.01-02-18 08:46 AMLike 0 - Now we've gone into scenarios that didn't happen and that aren't happening. Non-disclosure would make the actions illegal. Let's stick to what did happen and the fact that everything done has been done to meeting the fiduciary rules as have and continue to be examined by regulators as they do for every publicly traded company.
Hypothetical situations are the realm of arguments that can't be won on the basis of the real facts in real life.
Posted via CB1001-02-18 05:40 PMLike 0 -
Like playing what if with elections? Trump is still president, before him Obama and before him Bush. What does it matter about the past other than remembering it so it hopefully doesn't repeat itself..01-02-18 10:07 PMLike 0 - But the illustrations are just that, hypothetical answers because the minority shareholders don't have the votes to override the majority.
Like playing what if with elections? Trump is still president, before him Obama and before him Bush. What does it matter about the past other than remembering it so it hopefully doesn't repeat itself..
Also, as I said before I don't think we will ever see a shareholder lawsuit on this issue because Chen's decisions had at least a veneer of validity to them and the handset business easily could have failed anyway.
Since we're now repeating ourselves maybe we should stop. Maybe I will look for some of those articles about the deal from 2013 at some point.
Posted via CB1001-03-18 12:54 AMLike 0 - But the illustrations are just that, hypothetical answers because the minority shareholders don't have the votes to override the majority.
Like playing what if with elections? Trump is still president, before him Obama and before him Bush. What does it matter about the past other than remembering it so it hopefully doesn't repeat itself..01-03-18 02:50 AMLike 0 - I don't know about Canada but in the U.S just because the minority can be out voted every time doesn't mean that the minority doesn't have rights. JSmith made this point earlier. We have a legal system for this purpose.
Also, as I said before I don't think we will ever see a shareholder lawsuit on this issue because Chen's decisions had at least a veneer of validity to them and the handset business easily could have failed anyway.
Since we're now repeating ourselves maybe we should stop. Maybe I will look for some of those articles about the deal from 2013 at some point.
Posted via CB10Markmall has a legitimate point though. Just because a minority shareholder gets out voted by a majority shareholder doesn't mean that the minority shareholder isn't owed certain duties from management, or that such a vote would absolve management of any "self-dealing" liabilities. If a minority shareholder wants to bring action against blackberry, it's BOD, or certain individuals for self-dealing they'd be entitled to do so......and before anyone says anything, NOBODY knows how that would play out in court, that's why we have discovery.
This started out as comments that Chen/Watsa had done something wrong either legally or regulatory. Then we moved into other areas regarding future management conflict of interest which has now evolved into hypothetical situations of what types of rights minority shareholders have when in conflict with majority shareholders.
It's pretty simple, in the USA, and probably Canada as well, since international law has to have some general agreements that allow multinational shareholders and corporations basic protections.
Actions that are taken by management has to benefit everyone in specific class equally. If someone buys up existing debt of any impaired company, once it becomes a material amount that has to be disclosed. Can a member of a class use this for power leverage against the others in a lower class? Yes. This strategic maneuvering is allowed because companies have chosen to issue debt and equity publicly to raise capital.
Prem Watsa, Warren Buffett, Carl Icahn and multitudes of others between have legal counsel to advise in how to use tactics like this for gaining control of companies that each corporate leader wishes to own parts of and possibly own completely.
The fiduciary role of the BOD and corporate executives is to choose a strategy to maximize shareholder return. They cannot violate security laws and/or regulations in the process as that exposes those parties to criminal and/or civil litigation.
Your rights as minority shareholders are to wage a proxy fight and convince people to support your strategy of BB10, device hardware in general or embark on some other business strategy like building fidget spinners with the BlackBerry logo.
Tactics like these were used heavily in the 80s by minority shareholders to shake up the executive suites of mismanaged companies. This is why many regulations are now in place that protect all shareholders better regarding fiduciary duties.
That's also why private equity companies take companies private, equity and debt, with cash they've raised. That way they can operate company as they wish and not answer to anyone but themselves.
BlackBerry executives and the BOD mismanaged the development and implementation of BB10 from the very beginning. This was a disaster that should have been forseen before $1 was spent past initial business plan analysis. The mistake in the beginning was not protecting shareholders equity and BBOS since it was providing bulk of monthly revenue and depended on maintaining better carrier relationships.
Hardware was dead long before Chen because the carriers supported companies that allowed those carriers to divorce BlackBerry.anon(9803228) likes this.01-03-18 08:59 AMLike 1 - Actions that are taken by management has to benefit everyone in specific class equally. If someone buys up existing debt of any impaired company, once it becomes a material amount that has to be disclosed. Can a member of a class use this for power leverage against the others in a lower class? Yes. This strategic maneuvering is allowed because companies have chosen to issue debt and equity publicly to raise capital.
I understand that Watsa is a mixture of equity and debt but his interests are not fully aligned with the shareholders.01-05-18 03:45 PMLike 0 - I don't think so. First, debt holders are not a class of anything. They are not shareholders. Also, where does it say that in order to issue debt, you have to give board seats to your creditors? Most companies hire investment banks who then sell bonds to investors when they want to raise debt. Smaller companies work with banks. They don't cede control of the company to lenders, because lenders would run it completely differently.
I understand that Watsa is a mixture of equity and debt but his interests are not fully aligned with the shareholders.
Again, BB was in a bad position with no realistic options. Third down pass was dropped in the end zone, quarterback was pulled out injured, field goal ties game, and best kicker in the league joined team day before the game.
In bankruptcy, you pretty much cede all control to lenders and equity is wiped out. Shareholders chose Fairfax and Watsa because it was the only deal on table.01-05-18 04:44 PMLike 0 - The only thing for sure, is that had Chen & Co. NOT scrapped devices, there would not only have been a lawsuit from shareholders, but likely an investigation from the SEC for gross incompetence.anon(9803228) likes this.01-05-18 05:57 PMLike 1
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noun
an opinion or conclusion formed on the basis of incomplete information.
Unless he has some inside knowledge from shareholders and the SEC, then it's conjecture. Plain and simple.
I've made the point many times, but nobody knows what would have happened or could have happened with Blackberry. If blackberry never brought Chen in would bb10 have survived? Maybe, maybe not. Would the company have gone bankrupt? Maybe, maybe not. Would shareholders have filed suit? Maybe, maybe not. It's all speculation and conjecture. All we know is what did happen.
But what Markmall is talking about is exactly that, what did happen. His point is that there appears to be a conflict of interest. You say this has been disclosed and doesn't matter. It may not matter to many, but it obviously matters to some.01-07-18 04:43 AMLike 0 - con·jec·ture/kənˈjekCHər/
noun
an opinion or conclusion formed on the basis of incomplete information.
Unless he has some inside knowledge from shareholders and the SEC, then it's conjecture. Plain and simple.
I've made the point many times, but nobody knows what would have happened or could have happened with Blackberry. If blackberry never brought Chen in would bb10 have survived? Maybe, maybe not. Would the company have gone bankrupt? Maybe, maybe not. Would shareholders have filed suit? Maybe, maybe not. It's all speculation and conjecture. All we know is what did happen.
But what Markmall is talking about is exactly that, what did happen. His point is that there appears to be a conflict of interest. You say this has been disclosed and doesn't matter. It may not matter to many, but it obviously matters to some.
The conflict of interest really isn't conflict since it was disclosed as part of loan offer. It would be issue, only if not disclosed, or if loan was accepted when other available options existed. Nobody else stepped forward to help company. No lending institutions of any kind were going to loan BlackBerry any money if bankruptcy looming on horizon.
This company had gone past the stage of possibilities for happy BB10 ending and was in the stage of probabilities for bankruptcy unless it stopped BB10. The end of BB10 was already written at introduction when it was evident the ecosystem would never satisfy consumer demand. That was beyond the control of BlackBerry. Customers of major companies were instructed daily to buy Android/IOS hardware if apps desired. These companies told customers, they weren't supporting a new fifth OS. Many already supported Windows and BBOS.
Chen's turnaround looks simple in hindsight. It was a tightrope walk because the company needed more cash for a buffer and was only given amount to allow for no significant margin of error.
At this point, many including myself have explained in detail, the reasons for why other strategies would fail and with the reasons why.
Perhaps you or markmall could explain in similar detail how you in the role of management could have followed a realistic different path within the actual limitations the company faced.Troy Tiscareno and anon(9803228) like this.01-07-18 05:39 AMLike 2 - I had one idea
One thing that BlackBerry can do is to create something that no one did before. There is still some of old good BlackBerry phones out there and I belive they are still in some of the drawers. Let's say 9900 Bold, Z10, Z30, Passport, Leap. They have a hardware that can run maybe not latest android but BlackBerry can create some new "BlackBerry lite system". All they need is create a team of ten people and make all most common apps from Play store market. Imagine that you can use faster Facebook, Twitter, Instagram etc. . . on old Bold which battery goes longer than most of the android phones. Those phones worth now 20 or 50$. BlackBerry can put an update on that system for let's say 5 or 10$ and all the apps can cost some 1 or 2$.
I would love to use my old Bold touch screen fat boy once again with all great apps for totally 20+ dollars
All the best and never give up of your dreams in this New Year01-07-18 08:00 AMLike 0 - I had one idea
One thing that BlackBerry can do is to create something that no one did before. There is still some of old good BlackBerry phones out there and I belive they are still in some of the drawers. Let's say 9900 Bold, Z10, Z30, Passport, Leap. They have a hardware that can run maybe not latest android but BlackBerry can create some new "BlackBerry lite system". All they need is create a team of ten people and make all most common apps from Play store market. Imagine that you can use faster Facebook, Twitter, Instagram etc. . . on old Bold which battery goes longer than most of the android phones. Those phones worth now 20 or 50$. BlackBerry can put an update on that system for let's say 5 or 10$ and all the apps can cost some 1 or 2$.
I would love to use my old Bold touch screen fat boy once again with all great apps for totally 20+ dollars
All the best and never give up of your dreams in this New YearDunt Dunt Dunt likes this.01-07-18 09:54 AMLike 1 - Denial
noun de·ni·al \ di-ˈnī(-ə)l , dē- \
6 psychology : a defense mechanism in which confrontation with a personal problem or with reality is avoided by denying the existence of the problem or reality01-07-18 10:29 AMLike 3 - Delusion
noun de·lu·sion \ di-ˈlü-zhən \
2 : a false belief regarding the self or persons or objects outside the self that persists despite the facts and occurs in some psychotic states01-07-18 10:33 AMLike 4 -
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