[markmall]

That’s what I’m trying to figure out from this thread.

If the issue here is investment in BB10, that wouldn’t have been good for debt OR equity. We’d all have lost a ton of money if they kept throwing good money after bad. On that issue I think any sensible investor in BB, Watsa and BoD included, should agree.

It's not so much "investment in BB10" as investment in phone launches and marketing -- for BB10 and later Android -- so that people outside of Crackberry know it exists.

I knew the Android effort was a waste of time and would fail. I posted it on this site before the Priv was even released. I knew Chen would not do what had to be done for success.

Yeah, Blackberry easily could have failed...Maybe even greater than 50% chance of failing. But that is why people own more than one stock in their portfolio. BlackBerry was a long shot with big upside.

Now it's nothing. It's just a cluster of companies paying interest to Watsa. It is dead money for shareholders. Why anyone would hold it is beyond me. Where is the great engineering that will produce consistent revenue growth?

It's sad listening to the talk about Internet of things and self driving cars like a kid trying to raise money at a start up. It's all speculative pie in the sky stuff. Chen won't spend enough to create great tech. His leash is too short.

Posted via CB10

[app_Developer]

Why do you guys keep fixating only on BB10? His Android effort was half--ssed also.

Troy, you keep stating that Chen meant to fail on BB10 just to burn off purchase commitments. I watched the whole thing play out and do not agree with this. I don't think Chen had enough information even to know it would fail. This was not even his area.

Chen's management style guaranteed its failure though. That is the risk aversion a lender would prefer but a shareholder would abhor.

Posted via CB10

Purchase commitment are contractual commitments to buy components and services.

You can see the value of the purchase commitments in the quarterly filings. You can see them decrease steadily under Chen.

You can’t fail at something you weren’t trying to do. They were never trying to save the handset business under Chen. Instead of pulling the plug and eating a huge loss to settle the purchase commitments, they instead satisfied the commitment by running a very low key phone business that managed to stay relatively close to break even. Then when the commitments were finally all satisfied, they pulled the plug and switched to licensing.

Again, every observation of their actions indicates they were winding down the phone business once Chen started. They were trying to get to a soft landing, while buying time to get the software business ramped up.

That is not failure. It is choosing a strategy (in this case to retreat from the business they couldn’t win and focus on one they can) and then executing on that strategy.

It’s only a failure if you’re holding onto dreams of the old BB that made phones. That BB is dead. Over. Finished. Moved on. Left the station. Retired. Into the sunset. Goodnight. Gone to the business strategy farm in the sky. Seriously.

[markmall]

Purchase commitment are contractual commitments to buy components and services.

You can see the value of the purchase commitments in the quarterly filings. You can see them decrease steadily under Chen.

You can’t fail at something you weren’t trying to do. They were never trying to save the handset business under Chen. Instead of pulling the plug and eating a huge loss to settle the purchase commitments, they instead satisfied the commitment by running a very low key phone business that managed to stay relatively close to break even. Then when the commitments were finally all satisfied, they pulled the plug and switched to licensing.

Again, every observation of their actions indicates they were winding down the phone business once Chen started. They were trying to get to a soft landing, while buying time to get the software business ramped up.

That is not failure. It is choosing a strategy (in this case to retreat from the business they couldn’t win and focus on one they can) and then executing on that strategy.

It’s only a failure if you’re holding onto dreams of the old BB that made phones. That BB is dead. Over. Finished. Moved on. Left the station. Retired. Into the sunset. Goodnight. Gone to the business strategy farm in the sky. Seriously.

I would love to see those numbers broken out in the financials. I listened to most if not all of the earnings calls around this time and I don't remember any discussion of these commitments as a main driving force for the company's strategy.

If BB really had no hope of succeeding in handsets, it would have lost less money just telling the vendors, "we're getting out of the business and can pay you something for our commitment if you can't find another buyer." Or pay for lost profits if the parts were not already made.

I've seen no convincing evidence of this and I think I would have been aware of it.

Lastly, if true then I think Chen should not have misled investors that he was really hopeful to be profitable at 10 million phones and then 5 million, or whatever, if he were going to axe the core business the whole time and knew he would not hit those targets. He sure fooled me, and I'm upset if that is what he really did (which he didn't).

Posted via CB10

[Chuck Finley69]

I would love to see those numbers broken out in the financials. I listened to most if not all of the earnings calls around this time and I don't remember any discussion of these commitments as a main driving force for the company's strategy.

If BB really had no hope of succeeding in handsets, it would have lost less money just telling the vendors, "we're getting out of the business and can pay you something for our commitment if you can't find another buyer." Or pay for lost profits if the parts were not already made.

I've seen no convincing evidence of this and I think I would have been aware of it.

Lastly, if true then I think Chen should not have misled investors that he was really hopeful to be profitable at 10 million phones and then 5 million, or whatever, if he were going to axe the core business the whole time and knew he would not hit those targets. He sure fooled me, and I'm upset if that is what he really did (which he didn't).

Posted via CB10

What investors got misled? Chen said if the company sold x phones at given point, it would be profitable. Fiduciary responsibility then requires that he follow a business strategy within the company's financial ability for remaining an ongoing concern while pursuing the strategy. Investors expect their BOD to protect their investment before seeking to maximize returns. Investing money in public companies means the investors of that money have the right to expect their money isn't squandered recklessly on failed business strategies.

Purchase commitments are legal obligations the company entered into. They're obligated to pay for them as they agreed just like other creditor obligations such as leases and mortgages. The manufacturers required this from BlackBerry or they wouldn't commit to supplying the parts since components are partially customized for each customer. If your strategy was available, without having to enter bankruptcy and wiping out the shareholders, executive management would have gone that route since it would have provided needed cash flow to keep overall company running with existing non BB10 products.

Even if Chen had really believed in BB10, after the last CEO broke the company, there is no way the BOD would have allowed BB10 hardware strategy beyond what actually was used by Chen to offload those purchase commitment devices actually produced. The devices existed and were paid for. They needed to be unloaded in a way to minimize losses to shareholders. This was done while always mentioning BlackBerry might exit hardware. Same thing with Android devices.

The strategy was always to replace a BIS type revenue structure. The plan was to return BlackBerry to kind of company it was, before the folly of BB10. You see, John Chen has been doing his fiduciary job, the whole time.

[Chuck Finley69]

It's not so much "investment in BB10" as investment in phone launches and marketing -- for BB10 and later Android -- so that people outside of Crackberry know it exists.

I knew the Android effort was a waste of time and would fail. I posted it on this site before the Priv was even released. I knew Chen would not do what had to be done for success.

Yeah, Blackberry easily could have failed...Maybe even greater than 50% chance of failing. But that is why people own more than one stock in their portfolio. BlackBerry was a long shot with big upside.

Now it's nothing. It's just a cluster of companies paying interest to Watsa. It is dead money for shareholders. Why anyone would hold it is beyond me. Where is the great engineering that will produce consistent revenue growth?

It's sad listening to the talk about Internet of things and self driving cars like a kid trying to raise money at a start up. It's all speculative pie in the sky stuff. Chen won't spend enough to create great tech. His leash is too short.

Posted via CB10

BlackBerry was the gamble equity play in 2011-2012 when BBOS revenue was still healthy and BB10 was supposedly on course. It was a gamble equity play before the founders were dumped for Heins. At this point, in the end of 2012 and beginning of 2013 when BB10 was introduced, the BB10 gamble play rolled the dice for the last time. BlackBerry had bet the last of it's assets on BB10 success and lost when sales were below expectations and returns were above expectations.

It was a gamble equity play when the company was put up for sale. At this point, nobody will buy the company because it can be purchased cheaper in bankruptcy and divided up. This is when BB10 ( and probably Android hardware) is no longer an option for the company to survive. The gamble equity play now was for the survival of BlackBerry the company.

The company ran out the cash to gamble with. The remaining company had to be saved in order to save jobs and whatever assets were salvageable as ongoing concern for BlackBerry to continue in the future.

[Chuck Finley69]

That is right. If Chen made an announcement in 2013 that starting from the date of his hiring he would act in the best interests of both the shareholders and the debt holders -- because his favorite shareholder held debt -- this would still be illegal.

Posted via CB10

No. Because the announcements were de facto made by the required hiring of Chen at the demand of Fairfax as part of $1 Billion loan/debt. The BOD and shareholders were free to NOT accept the loan with all of its conditions. The board and the majority of shareholders were required to support this so as to not be able to claim a conflict of interest later on.

The majority of the BOD and majority of shareholders accepted this loan offer with all of it's final provisions in order to get the cash infusion. This was all required to be legal..

[Chuck Finley69]

Why do you guys keep fixating only on BB10? His Android effort was half--ssed also.

Troy, you keep stating that Chen meant to fail on BB10 just to burn off purchase commitments. I watched the whole thing play out and do not agree with this. I don't think Chen had enough information even to know it would fail. This was not even his area.

Chen's management style guaranteed its failure though. That is the risk aversion a lender would prefer but a shareholder would abhor.

Posted via CB10

When the company is almost belly up, the majority of shareholders prefer a strategy that protects their shares from going to zero. The majority of shareholders in companies like BlackBerry are managing retirement assets or similar for other people and companies.

The courts don't want fiduciary managers gambling with client money. They are expected to make sound and prudent decisions.

[ChicaneBT]

You will have to buy a Sony X on that phone you can easily install Sailfish. Beside that phone I can't find a manufacturer in Europe which sells a phone with Sailfish installed on it by default. I just want a phone with Sailfish for a good price. I'm not looking for a 250 euro phone the Sony X + 50 euro for Sailfish.

[Emaderton3]

If everyone can keep hypothesizing that Chen was not the right person to save BB10 and the handset division, you need to admit that it is also possible that they could not be saved regardless of whomever was brought in.

[app_Developer]

I would love to see those numbers broken out in the financials. I listened to most if not all of the earnings calls around this time and I don't remember any discussion of these commitments as a main driving force for the company's strategy.

If BB really had no hope of succeeding in handsets, it would have lost less money just telling the vendors, "we're getting out of the business and can pay you something for our commitment if you can't find another buyer." Or pay for lost profits if the parts were not already made.

I've seen no convincing evidence of this and I think I would have been aware of it.

Lastly, if true then I think Chen should not have misled investors that he was really hopeful to be profitable at 10 million phones and then 5 million, or whatever, if he were going to axe the core business the whole time and knew he would not hit those targets. He sure fooled me, and I'm upset if that is what he really did (which he didn't).

Posted via CB10

Every quarterly statement is available on BlackBerry’s site.

Download the PDFs and then, using whatever PDF viewer you prefer, search for “purchase commitment”

It’s all there in the financials

[glwerry]

If everyone can keep hypothesizing that Chen was not the right person to save BB10 and the handset division, you need to admit that it is also possible that they could not be saved regardless of whomever was brought in.

More to the point, my understanding is that the Board of Directors had ALREADY MADE THE DECISION TO EXIT THE HARDWARE BUSINESS (and BB10 as well) BEFORE Chen was hired.
So, the entire debate about someone other than Chen being able to save BB10 is pointless.

[Emaderton3]

More to the point, my understanding is that the Board of Directors had ALREADY MADE THE DECISION TO EXIT THE HARDWARE BUSINESS (and BB10 as well) BEFORE Chen was hired.
So, the entire debate about someone other than Chen being able to save BB10 is pointless.

Agreed.

[Dunt Dunt Dunt]

More to the point, my understanding is that the Board of Directors had ALREADY MADE THE DECISION TO EXIT THE HARDWARE BUSINESS (and BB10 as well) BEFORE Chen was hired.
So, the entire debate about someone other than Chen being able to save BB10 is pointless.

Four years later and they are out of the hardware business and have given BB10 an expiration date.... it's beyond pointless.

My view is when Thor panicked and put out the For Sale Sign, things were really bad. That BlackBerry is still here in some form is nothing short of a Miracle. Do think that some statements were a lot of smoke and mirrors - maybe some overly optimistic BB10 fans got the wrong idea.... oh well. I've also said that fans don't make good investment decisions sometimes.

[markmall]

More to the point, my understanding is that the Board of Directors had ALREADY MADE THE DECISION TO EXIT THE HARDWARE BUSINESS (and BB10 as well) BEFORE Chen was hired.
So, the entire debate about someone other than Chen being able to save BB10 is pointless.

Where do you get this understanding from? The echo chamber that is Crackberry? Like I said, I was watching this company during this period and listening to every word Chen said. No one ever said this.

Posted via CB10

[markmall]

Four years later and they are out of the hardware business and have given BB10 an expiration date.... it's beyond pointless.

My view is when Thor panicked and put out the For Sale Sign, things were really bad. That BlackBerry is still here in some form is nothing short of a Miracle. Do think that some statements were a lot of smoke and mirrors - maybe some overly optimistic BB10 fans got the wrong idea.... oh well. I've also said that fans don't make good investment decisions sometimes.

Miracle? The company had a lot of hard assets and IP. Watsa dumped a bunch of cash on it. Chen turned it into a start up incubator. Wow, amazing!

Posted via CB10

[markmall]

What investors got misled? Chen said if the company sold x phones at given point, it would be profitable.

It's misleading if Chen had no intention of continuing in handsets and set it up to fail. It is. These are two different things: 1) I am actively transitioning the company out of handsets and burning off commitments in order to minimize loss versus 2) I think we can be profitable at X million and I think we can hit this number.

Let's not forget all of the messages to consumers at the same time about commitment to the operating system.

So Chen committed investor fraud under your theory.



Posted via CB10

[markmall]

You can see the value of the purchase commitments in the quarterly filings. You can see them decrease steadily under Chen.

Really? What line item on a balance sheet breaks out purchase order commitments from other long term liabilities? Is it somewhere else?

I am looking at Q1 2014 now and I just see "accrued liabilities" on the balance sheet. So where is this line item we can see decline each month? I don't see any footnotes on this issue either.

There is just a generic legal disclosure buried amongst others that certain purchase commitments exist and may affect future performance.

Echo chamber.



Posted via CB10

[markmall]

duplicate ppst

Posted via CB10

Posted via CB10

[app_Developer]

Really? What line item on a balance sheet breaks out purchase order commitments from other long term liabilities? Is it somewhere else?

I am looking at Q1 2014 now and I just see "accrued liabilities" on the balance sheet. So where is this line item we can see decline each month? I don't see any footnotes on this issue either.

There is just a generic legal disclosure buried amongst others that certain purchase commitments exist and may affect future performance.

Echo chamber.



Posted via CB10

You can lead a horse to water...

Are you sure you are reading the actual filing or just the press release?

https://us.blackberry.com/content/da...nal_filing.pdf

Page 11 of the actual filing ^^^

[eshropshire]

What exactly did he do or not do, that was not in the best interest of the company?

He made the company profitable and placed BlackBerry Limited on a solid foundation for growth. All of Chen's major decisions were approved by the Board. If there was a majority of shareholders who were against the Board actions they could have fought the Board for control. I have not read of any action taken against the Board since Chen took over.

[app_Developer]

It's misleading if Chen had no intention of continuing in handsets and set it up to fail. It is. These are two different things: 1) I am actively transitioning the company out of handsets and burning off commitments in order to minimize loss versus 2) I think we can be profitable at X million and I think we can hit this number.

Let's not forget all of the messages to consumers at the same time about commitment to the operating system.

So Chen committed investor fraud under your theory.



Posted via CB10

Those are not contradictory if you go back and listen to what Chen said and not what you and other handset fans wanted to hear.

If they had reached the 10M or 5M they might have been able to sustain that. But he also said repeatedly that if they fell short of that mark they would get out. That was always the context of that message. What he said was probably true. What he did NOT say is that BB would make investments in advertising to try to reach that number. He never said that. He said we might reach that number, and if we don’t, oh well peace out.

If they had spent money on advertising, that 10M figure would have risen (probably quite a bit because advertising in large markets is expensive)

[Invictus0]

Those are not contradictory if you go back and listen to what Chen said and not what you and other handset fans wanted to hear.

If they had reached the 10M or 5M they might have been able to sustain that. But he also said repeatedly that if they fell short of that mark they would get out. That was always the context of that message. What he said was probably true. What he did NOT say is that BB would make investments in advertising to try to reach that number. He never said that. He said we might reach that number, and if we don’t, oh well peace out.

If they had spent money on advertising, that 10M figure would have risen (probably quite a bit because advertising in large markets is expensive)

Keep in mind that BlackBerry had left the consumer market in 2013 under Heins and in 2014 (when announcing the 10 million figure) they made a pivot to high security/regulated industries, advertising wouldn't be as competitive there as it is in the consumer market.

https://www.reuters.com/article/us-b...A3822M20140410

That being said, they certainly did push the Passport and Classic (hired a new marketing firm, brought new apps to the platform, started Passport partnerships/studies with hospitals, etc) but I think they underestimated overall demand. The failure of the Fire Phone and (as a result) the Amazon Appstore play for consumer apps probably didn't help their sales much in other markets either (consumer, general enterprise, etc).

[Chuck Finley69]

It's misleading if Chen had no intention of continuing in handsets and set it up to fail. It is. These are two different things: 1) I am actively transitioning the company out of handsets and burning off commitments in order to minimize loss versus 2) I think we can be profitable at X million and I think we can hit this number.

Let's not forget all of the messages to consumers at the same time about commitment to the operating system.

So Chen committed investor fraud under your theory.



Posted via CB10

What investor fraud? He didn't lie and he said what needed to be said to keep share price stable. He basically stated the obvious that if minimum numbers weren't met, they'd exit the business. Then switching to Android, he lowered the minimum number. The company did the minimum regarding spending money because it didn't have any compared to other areas of the company that offered better returns and lower risks.

Chen has done nothing but his required job for all shareholders which is putting the company's health and stability first.

[markmall]

Those are not contradictory if you go back and listen to what Chen said and not what you and other handset fans wanted to hear.

If they had reached the 10M or 5M they might have been able to sustain that. But he also said repeatedly that if they fell short of that mark they would get out. That was always the context of that message. What he said was probably true. What he did NOT say is that BB would make investments in advertising to try to reach that number. He never said that. He said we might reach that number, and if we don’t, oh well peace out.

If they had spent money on advertising, that 10M figure would have risen (probably quite a bit because advertising in large markets is expensive)

If you don't think those are contradictory then we've reached an endpoint.

Posted via CB10

[eshropshire]

What investor fraud? He didn't lie and he said what needed to be said to keep share price stable. He basically stated the obvious that if minimum numbers weren't met, they'd exit the business. Then switching to Android, he lowered the minimum number. The company did the minimum regarding spending money because it didn't have any compared to other areas of the company that offered better returns and lower risks.

Chen has done nothing but his required job for all shareholders which is putting the company's health and stability first.

From day one Chen has stated his plan was to transform BlackBerry into on enterprise software company. He also stated that if hardware could become profitable it would stay part of the mix. The Board approved and enforced this plan. Chen has always talked about and repeatedly reiterated this plan. The fact that the Board approved the plan was obvious because they hired a CEO with great enterprise software experience and zero hardware experience.